Sushil Alias Susheel Kumar Chaudhari vs. The State Of Bihar

Facts

The petitioner filed a writ petition before the Patna High Court challenging an order dated March 13, 2020, passed by the Assistant Commissioner of State Taxes, Sitamarhi Circle, Sitamarhi, and the Summary of Order in Form GST DRC-07. The petitioner claimed the order was ex parte. The revenue, through its counsel, agreed to a remand of the matter to the Assessing Authority for a fresh decision on merits, with no coercive steps to be taken against the petitioner during the pendency of the case. The Court noted that despite the statutory remedy, it could interfere due to violations of natural justice and lack of sufficient reasons in the ex parte order.

Held

The Court held that the impugned order dated March 13, 2020, and the Summary of Order in Form GST DRC-07 were bad in law primarily on two grounds: (a) violation of the principles of natural justice, specifically the lack of a fair opportunity of hearing afforded to the petitioner, as insufficient time was given to represent their case; and (b) the order was passed ex parte without assigning sufficient reasons for determining the amount due and payable by the assessee. The Court found that an ex parte order passed in violation of natural justice entails civil consequences. Consequently, the Court quashed and set aside the impugned order and the Summary of Order. The Court directed the petitioner to deposit ten percent of the total amount (if not already deposited) and additionally deposit another ten percent of the demand raised within four weeks, without prejudice to their rights. The Court also ordered the de-freezing of the petitioner's bank accounts and 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 preferably within two months. No opinion was expressed on the merits of the case, and all issues were left open.

Key Issues

1. Whether the impugned order dated March 13, 2020, and the Summary of Order in Form GST DRC-07 are liable to be quashed on the ground of violation of the principles of natural justice, specifically the lack of a fair opportunity of hearing afforded to the petitioner? 2. Whether the ex parte order, which allegedly lacks sufficient reasons for determining the amount due and payable by the assessee, is bad in law? Petitioner's Contention: The petitioner argued that the order was passed ex parte and that insufficient time was provided to represent their case, thus violating the principles of natural justice. The petitioner also contended that the order lacked sufficient reasons for determining the tax liability. Revenue's Contention: The learned counsel for the Revenue stated that they had no objection if the matter was remanded to the Assessing Authority for deciding the case afresh on merits. The Revenue also agreed that no coercive steps would be taken against the petitioner during the pendency of the case.