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

Facts

The petitioner 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 sought the de-attachment of their bank accounts, which had been attached post 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, reserving others for future proceedings. The Court noted that the impugned order was passed ex parte and without sufficient reasons, violating 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, was bad in law on two grounds: (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 order was passed ex parte without assigning sufficient reasons for determining the amount due. The Court found that these violations entailed civil consequences. Therefore, notwithstanding the statutory remedy of appeal, the Court decided to interfere. The Court quashed and set aside the impugned order and the summary of order issued in form GST DRC-07. The Court directed the de-freezing of the petitioner's bank accounts. The petitioner undertook to deposit 10% of the total demand additionally within four weeks, without prejudice to their rights. The petitioner also undertook to appear before the Assessing Officer on July 21, 2021, and cooperate in the proceedings. The Assessing Officer was directed to pass a fresh order expeditiously after affording adequate opportunity to all concerned. The Court explicitly stated that it had not expressed any opinion 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, is bad in law due to violation of principles of natural justice, specifically the lack of a fair opportunity of hearing and the ex parte nature of the order? 2. Whether the Court should interfere in the matter despite the existence of an alternative statutory remedy of appeal under the Bihar Goods and Services Tax Act, 2017? Petitioner's Arguments: The petitioner argued that the order was passed in violation of the principles of natural justice as they were not afforded sufficient time to present their case, and the order was passed ex parte without adequate reasoning. They also highlighted the civil consequences of such an order. Revenue's Arguments: The Revenue contended 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, and therefore, the writ petition was not maintainable.