M/S Pramod Khad Bhandar vs. The Union Of INDIA

Facts

The petitioner, a taxpayer, filed a writ petition before the Patna High Court challenging an order dated March 5, 2020, passed by the Assistant Commissioner of State Taxes, Sasaram Circle. The petitioner also challenged the summary of order issued in form GST DRC-07, both under Section 73 of the State Act. The petitioner's bank accounts were attached post the impugned order. The Revenue contended that the petitioner had an alternative efficacious remedy of appeal under the Bihar Goods and Services Tax Act, 2017. The petitioner confined his relief to specific prayer clauses, reserving liberty to pursue others later. The Court noted that the petitioner had already deposited 10% of the disputed amount.

Held

The Court held that notwithstanding the statutory remedy of appeal, it was not precluded from interfering with the order if it was ex facie bad in law. The Court found two primary reasons for interference: (a) violation of the principles of natural justice, specifically the lack of a fair opportunity of hearing and insufficient time afforded to the petitioner, and (b) the ex parte order lacked sufficient reasons for determining the amount due and payable by the assessee. Consequently, the Court quashed and set aside the impugned order dated March 5, 2020, and the summary of order issued in form GST DRC-07. The Court directed the de-freezing/de-attaching of the petitioner's bank accounts. The petitioner was directed to deposit an additional ten percent of the demand within four weeks. The Assessing Officer was directed to pass a fresh order after affording adequate opportunity to all concerned, expeditiously, and preferably within two months from the petitioner's appearance. The Court explicitly stated that it had not expressed any opinion on the merits of the case and all issues were left open. Liberty was reserved for the petitioner to challenge the fresh order and for parties to pursue other remedies.

Key Issues

1. Whether the impugned order dated March 5, 2020, passed by the Assistant Commissioner of State Taxes, Sasaram Circle, under Section 73 of the State Act, and the summary of order in form GST DRC-07, are bad in law due to violation of principles of natural justice, specifically the lack of a fair opportunity of hearing and insufficient time afforded to the petitioner to represent their case? 2. Whether the ex parte order, which does not assign sufficient reasons for determining the amount due and payable by the assessee, is liable to be quashed? Petitioner's arguments: The petitioner argued that the impugned order was passed in violation of the principles of natural justice, as they were not afforded a fair opportunity of hearing and sufficient time to present their case. They also contended that the ex parte order lacked sufficient reasoning for determining the demand. Revenue's arguments: The Revenue argued that the petitioner had an equally alternative and efficacious remedy of filing an appeal under the provisions of the Bihar Goods and Services Tax Act, 2017.