Vivek Kumar vs. The State Of Bihar

Facts

The petitioner sought to quash an ex parte order dated March 5, 2020, passed by the Assistant Commissioner of State Tax, Patna, and a notice to a third person dated January 11, 2021, issued by the Joint Commissioner of State Tax, Patna. The petitioner argued that the order was passed in violation of principles of natural justice, as they were not afforded a fair opportunity of hearing and sufficient time to present their case. The Revenue, through its counsel, stated it 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. The Court noted that the order was ex parte and lacked sufficient reasons for determining the amount due.

Held

The Court held that the impugned order dated March 5, 2020, and the notice dated January 11, 2021, were liable to be quashed. The Court found that the order was passed in violation of the principles of natural justice, specifically by failing to provide the petitioner with a fair opportunity of hearing and sufficient time to present their case. Furthermore, the Court noted that the ex parte order lacked sufficient reasoning to decipher how the officer determined the amount due and payable by the assessee. The Court reasoned that an order passed ex parte in violation of natural justice entails civil consequences, justifying interference by the High Court. Consequently, the Court quashed and set aside the impugned order and notice. The Court directed the petitioner to deposit ten percent of the total amount, if not already done, and additionally deposit another ten percent of the demand within four weeks, without prejudice to their rights. The bank accounts of the petitioner were ordered to be de-frozen. The Assessing Authority was directed 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 from the petitioner's appearance. 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 5, 2020, and the notice dated January 11, 2021, are liable to be quashed on the ground of violation of the principles of natural justice, specifically the right to a fair opportunity of hearing, as contended by the petitioner? 2. Whether the ex parte nature of the impugned order, which allegedly lacks sufficient reasoning for determining the amount due, renders it bad in law, as argued by the petitioner? Petitioner's Contentions: The petitioner argued that the impugned order and notice were bad in law due to a violation of the principles of natural justice. They contended that they were not given sufficient time to represent their case and that the order was passed ex parte without adequate reasoning. The petitioner relied on the inherent power of the High Court to interfere in such matters, even if statutory remedies exist. Revenue's Contentions: The Revenue stated that they had no objection to the matter being remanded to the Assessing Authority for a fresh decision on merits. They also agreed that no coercive steps should be taken against the petitioner during the pendency of the case. The Revenue did not present any arguments against the petitioner's claims regarding the violation of natural justice.