Bijay Kumar Yadav vs. The State Of Bihar

Held

The Court quashed and set aside the impugned order and summary of order dated June 10, 2022, passed by the Joint Commissioner of State Taxes, Supaul Circle. The Court found the order to be bad in law primarily due to the violation of the principles of natural justice, specifically the lack of a fair opportunity of hearing and the ex parte nature of the order, which did not provide sufficient reasons for the determination of the due amount. The Court noted that such an order, entailing civil consequences, could be interfered with even if a statutory remedy existed. The Court directed the petitioner to deposit twenty percent of the demanded amount within four weeks, without prejudice to their rights. The Court also ordered the de-freezing of the petitioner's bank accounts. The Assessing Authority was directed to decide the case on merits after complying with the principles of natural justice, affording parties an opportunity to present documents, and passing a speaking order within two months of the petitioner's appearance. No coercive steps are to be taken during this period. The Court explicitly stated that no opinion was expressed on the merits of the case, and all issues were left open.

Facts

The petitioner, Bijay Kumar Yadav, a proprietorship firm, filed a writ petition challenging an ex parte order dated June 10, 2022, passed by the Joint Commissioner of State Taxes, Supaul Circle. This order rejected the petitioner's input tax credit claim and imposed a demand of Rs. 14,12,790.52, including penalty, for the period April 2021 to February 2022. The petitioner contended that the order was passed without proper notice or an opportunity to be heard, and that it was initiated under Section 129(4) of the Bihar Goods and Services Tax Act, 2017, but proceeded under Section 74 without issuing the requisite notices. The petitioner also sought the release of their attached electronic credit ledger and a restraint on coercive recovery actions.

Key Issues

1. Whether the ex parte order dated June 10, 2022, passed by the Joint Commissioner of State Taxes, Supaul Circle, under Section 74 of the Central Goods and Services Tax Act, 2017 (and Bihar Goods and Services Tax Act, 2017) is illegal and without jurisdiction due to a violation of the principles of natural justice, specifically the lack of adequate notice and opportunity of hearing to the petitioner? Petitioner's arguments: The petitioner argued that the order was passed ex parte without sufficient notice or opportunity to present their defense, making it illegal and without jurisdiction. They further contended that the proceeding initiated under Section 129(4) of the Bihar Act was improperly converted to a Section 74 proceeding without the necessary notices under Section 74 being served. Revenue's arguments: The learned counsel for the Revenue stated they had no objection if the matter was remanded to the Assessing Authority for a fresh decision on merits, with no coercive steps taken against the petitioner during the pendency of the case.