Elevation Medisolutions LLP vs. The State Of Bihar

Facts

The petitioner, Elevation Medisolutions LLP, challenged an ex-parte order dated August 20, 2019, passed by the Joint Commissioner of State Taxes, Patna South & Patna West Circle. This order, purportedly under Section 73 of the Bihar Goods and Service Tax Act, 2017, determined a GST liability of Rs. 20,15,293.14 against the petitioner. The petitioner contended that this order was passed without any prior notice or opportunity of hearing, thus violating the principles of natural justice. The petitioner sought a writ of certiorari to quash the impugned order and a direction for a fresh order after granting an opportunity of hearing. The petitioner also expressed willingness to deposit Rs. 5 lacs without prejudice to their rights.

Held

The Court held that the principles of natural justice were violated in the passing of the impugned order dated 20.08.2019. The Court found the order to be absolutely cryptic, lacking any reasons, especially concerning the imposition of penalty. Consequently, the Court quashed and set aside the impugned order on the limited ground of violation of natural justice. The Court directed the petitioner to deposit Rs. 5 lacs by April 19, 2021, and appear before the authority on the same date for placing additional materials. The authority was directed to decide the matter afresh on merits, in compliance with the principles of natural justice, by July 31, 2021. The Court explicitly stated that it had not expressed any opinion on the merits of the case. Liberty was reserved for parties to take recourse to other remedies, and any excess deposit by the petitioner was to be refunded expeditiously.

Key Issues

1. Whether the ex-parte order dated 20.08.2019, passed by the Joint Commissioner of State Taxes under Section 73 of the Bihar Goods and Service Tax Act, 2017, is liable to be quashed for violation of the principles of natural justice, specifically for being passed without serving any notice upon the petitioner? Petitioner's Contention: The petitioner argued that the impugned order was passed ex-parte, without any notice or opportunity to be heard, thereby violating the fundamental principles of natural justice. They relied on the fact that no notice under Section 61 read with Rule 99 of the Bihar Goods and Service Tax Act, 2017, was served. The order was also described as cryptic and lacking reasons, particularly regarding penalty. Revenue's Contention: The judgment records no specific arguments from the revenue or the Union of India regarding the procedural propriety of the order or the violation of natural justice. However, the court's decision implies that the revenue did not effectively counter the petitioner's claim of procedural irregularity.