Raj Kumar Singh Raja Construction Private Limited vs. State Of Bihar

Facts

The petitioner, Raj Kumar Singh Raja Construction Private Limited, challenged orders passed by the Joint Commissioner of State Tax (Respondent No. 3) and the Additional Commissioner of State Tax (Appeal) (Respondent No. 2). The first order, dated March 7, 2020, under Section 74 of the Bihar Goods and Services Tax Act, 2017, pertained to the tax period September 2019. The second order, dated February 13, 2021, rejected the petitioner's appeal against the first order on the sole ground of delay. The petitioner also challenged an order dated Nil for the tax period August 2019, passed by Respondent No. 3 under Section 74(9) of the BGST Act. The petitioner contended that these orders were passed ex parte, without a reasonable opportunity of being heard, and without speaking orders. The petitioner had deposited ten percent of the demand as a prerequisite for hearing the appeal.

Held

The Court held that the impugned orders were bad in law for two primary reasons: (a) violation of the principles of natural justice, specifically the lack of a fair opportunity of hearing and insufficient time afforded to the petitioner to present their case, and (b) the ex parte nature of the orders, which failed to provide sufficient reasoning for determining the amount due. The Court found that the delay in filing the appeal was sufficiently explained by COVID-19 restrictions. Consequently, the Court quashed and set aside the impugned orders of the Additional Commissioner (Appeal) and the Joint Commissioner. The Court directed the Assessing Authority to decide the case on merits after complying with the principles of natural justice, affording adequate opportunity to all parties, and passing a speaking order. The Court also directed the de-freezing of the petitioner's bank accounts and accepted undertakings regarding further deposits and appearance. The Court explicitly stated that it had not expressed any opinion on the merits of the case, leaving all issues open.

Key Issues

1. Whether the orders dated March 7, 2020, and Nil, passed by the Joint Commissioner of State Tax under Section 74 of the Bihar Goods and Services Tax Act, 2017, are liable to be quashed for violation of the principles of natural justice, specifically the right to a fair hearing and the requirement of a speaking order? 2. Whether the order dated February 13, 2021, passed by the Additional Commissioner of State Tax (Appeal), rejecting the petitioner's appeal solely on the grounds of delay, is sustainable in light of the COVID-19 pandemic restrictions? Petitioner's arguments: The petitioner argued that the impugned orders were passed ex parte, without granting a reasonable opportunity of being heard, and lacked sufficient reasoning. They also contended that the delay in filing the appeal was attributable to COVID-19 restrictions. Revenue's arguments: The learned counsel for the Revenue stated they had no objection if the matter was remanded to the Assessing Authority for a fresh decision on merits, with no coercive steps taken against the petitioner during the pendency of the case.