M/S Meera Traders vs. The Union Of INDIA

Facts

The petitioner, a taxpayer, approached the High Court challenging an order dated March 8, 2020, passed by the Assistant Commissioner of State Taxes. The petitioner also sought the de-attachment of their bank accounts, which had been attached subsequent to the impugned order. The Revenue contended that the petitioner had an alternative efficacious remedy of filing an appeal under the Bihar Goods and Services Tax Act, 2017. The petitioner confined their relief to specific prayers concerning the quashing of the impugned order and the de-attachment of bank accounts, reserving liberty to pursue other prayers later. The proceedings were conducted via video conferencing.

Held

The Court held that it was not precluded from interfering in the matter, notwithstanding the statutory remedy, because the order was ex facie bad in law. This conclusion was based on 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 represent their case; and (b) the order being passed ex parte without assigning sufficient reasons that could be deciphered from the record, making it unclear how the officer determined the amount due. The Court noted that such an order, passed in violation of natural justice and entailing civil consequences, could be set aside on these grounds alone. Consequently, the Court quashed and set aside the impugned order dated March 8, 2020, passed by the Assistant Commissioner of State Taxes. The Court also directed the de-freezing/de-attachment of the petitioner's bank accounts. The Court accepted the petitioner's statement that 10% of the total amount had already been deposited and directed an additional 10% deposit within four weeks. The matter was remitted for a fresh order after affording adequate opportunity to all concerned. The Court expressly stated that it had not expressed any opinion on the merits of the case, leaving all issues open.

Key Issues

1. Whether the impugned order dated March 8, 2020, passed by the Assistant Commissioner of State Taxes, is bad in law due to violation of the principles of natural justice, specifically the lack of a fair opportunity of hearing and insufficient time afforded to the petitioner to represent their case, as contemplated under the relevant provisions of the Bihar Goods and Services Tax Act, 2017? 2. Whether the ex parte nature of the order, which allegedly does not assign sufficient reasons for determining the amount due and payable by the assessee, warrants interference by the High Court despite the existence of an alternative statutory remedy? Petitioner's Arguments: The petitioner argued that the order was passed in violation of the principles of natural justice, as they were not afforded a fair opportunity of hearing and insufficient time was given to present their case. They also contended that the order was passed ex parte without sufficient reasons. 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.