M/S. K.K.K.O. Brand Having Its Registered Office At Bansidehri, Sahar, Bhojpur, Bihar- 802208 vs. The State Of Bihar

Held

The Court held that the impugned order dated 05.02.2021 and the summary of order in Form GST DRC-07 dated 05.02.2021 were bad in law due to a clear violation of the principles of natural justice, specifically the lack of a fair opportunity of hearing afforded to the petitioner. The Court noted that no sufficient time was given to the petitioner to present their case, and the ex-parte order lacked sufficient reasoning to justify the determined amount due. The Court found that such an order, entailing civil consequences, was unsustainable on these grounds alone. Consequently, the Court quashed and set aside the impugned order. The Court directed the petitioner to deposit twenty percent of the demand within four weeks, without prejudice to their rights. The bank account(s) of the petitioner were ordered to be de-frozen/de-attached. The Assessing Authority was directed to decide the case on merits after complying with the principles of natural justice, affording opportunity for parties to submit documents, and passing a speaking order within two months of the petitioner's appearance. No coercive steps were to be taken against the petitioner during this period. The Court explicitly stated that it had not expressed any opinion on the merits of the case, leaving all issues open.

Facts

The petitioner, M/s. K.K.K.O. Brand, through its Proprietor Nand Kishor Singh, filed a writ petition before the Patna High Court challenging an ex-parte order dated 05.02.2021 and a summary of order in Form GST DRC-07, also dated 05.02.2021, issued by the Assistant Commissioner of State Tax, Shahabad Circle, Ara. This order, passed under Section 73(9) of the Bihar Goods and Services Tax Act, 2017, and Rule 142(5) of the Bihar Goods and Services Tax Rules, 2017, rejected the petitioner's input tax credit claim and imposed a demand of Rs. 46,590/-, including interest and penalty, without affording the petitioner an opportunity of hearing. The petitioner sought quashing of this order and a declaration that it was cryptic, misconceived, nonspeaking, and violative of natural justice.

Key Issues

1. Whether the ex-parte order dated 05.02.2021, issued by the Assistant Commissioner of State Tax, Shahabad Circle, Ara, and the summary of order in Form GST DRC-07 dated 05.02.2021, are liable to be quashed for being violative of the principles of natural justice, specifically the right to a fair opportunity of hearing, as provided under the Bihar Goods and Services Tax Act, 2017 and Rules, 2017. Petitioner's Contention: The petitioner argued that the impugned order was passed ex-parte without providing sufficient opportunity for them to represent their case, and that the order was cryptic, nonspeaking, and violative of natural justice. Revenue's Contention: The learned counsel for the Revenue stated that they had no objection if the matter was remanded to the Assessing Authority for deciding the case afresh on merits, and that no coercive steps would be taken against the petitioner during the pendency of the case.