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. The petitioner's bank accounts had been attached following 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 prayer clauses in the writ petition, reserving liberty to pursue other prayers later. The Court noted that the impugned order was passed ex parte and allegedly in violation of the principles of natural justice.

Held

The Court held that the impugned order dated March 5, 2020, passed by the Assistant Commissioner of State Taxes, Sasaram Circle, and the summary of order in Form GST DRC-07 were bad in law. The Court found two primary reasons for interference: (a) violation of the principles of natural justice, as the petitioner was not afforded a fair opportunity of hearing and sufficient time to present their case, and (b) the order was passed ex parte without sufficient reasons decipherable from the record as to how the officer determined the amount due. The Court reasoned that an ex parte order passed in violation of natural justice, entailing civil consequences, could be interfered with by the High Court, notwithstanding the statutory remedy. Consequently, the Court quashed and set aside the impugned order. The Court also 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 amount within four weeks, without prejudice to their rights. The Assessing Officer was directed to afford adequate opportunity to all concerned, including the petitioner, and pass a fresh order on merits expeditiously, preferably within two months of the petitioner's appearance. Liberty was reserved for the petitioner to challenge the fresh order and for parties to pursue other remedies. The Court explicitly stated that 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, passed by the Assistant Commissioner of State Taxes, Sasaram Circle, and the summary of order in Form GST DRC-07 are 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 present their case? 2. Whether the ex parte order, which allegedly lacks sufficient reasoning for determining the amount due and payable by the assessee, entails civil consequences and warrants interference by the High Court despite the availability of an alternative statutory remedy? Petitioner's Contentions: The petitioner argued that the order was passed ex parte without affording a fair opportunity of hearing and that insufficient time was given to represent their case. They also contended that the order lacked sufficient reasons for determining the demand, leading to civil consequences. Revenue's Contentions: The Revenue argued that the petitioner had an equally alternative efficacious remedy of filing an appeal under the provisions of the Bihar Goods and Services Tax Act, 2017.