M/S Kanhaiya Singh Vision Classes vs. The State Of Bihar

Held

The Court held that the ex parte appellate order dated January 9, 2021, and the original ex parte order dated February 20, 2019, were bad in law due to violations of the principles of natural justice. The Court found that the petitioner was not afforded a fair opportunity of hearing and that the orders lacked sufficient reasoning to determine the amounts due. The Court also noted that the authorities had not adjudicated the matter on the attending facts and circumstances. Consequently, the Court quashed and set aside both the appellate order and the original assessment order, along with the summary of orders and the bank attachment notice. The Court directed the petitioner to deposit 10% of the demand raised before the Assessing Officer within four weeks, without prejudice to the rights of the parties. The bank account was to be de-frozen immediately. The Assessing Authority was directed to decide the case afresh on merits after complying with the principles of natural justice, affording adequate opportunity to all parties, and passing a speaking order within two months. 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.

Facts

The petitioner, M/s Kanhaiya Singh Vision Classes, filed a writ petition challenging an ex parte appellate order dated January 9, 2021, issued by the Additional Commissioner of State Taxes (Appeal), Patna West Division. This appellate order rejected the petitioner's appeal against an ex parte order dated February 20, 2019, passed by the Assistant Commissioner of State Taxes, Patna South Circle. The original order, passed under Section 74 of the Bihar Goods and Services Tax Act, 2017, imposed tax, penalty, and interest for the period April 2018 to May 2018. The petitioner also challenged a summary of order in Form GST DRC-07 dated February 28, 2019, and a notice for bank account attachment dated August 4, 2022, issued under Section 79 of the Central Goods and Services Tax Act, 2017, read with the Bihar Act. The petitioner sought to quash these orders and restrain recovery.

Key Issues

1. Whether the ex parte appellate order dated January 9, 2021, passed by the Additional Commissioner of State Taxes (Appeal) is liable to be quashed for violating the principles of natural justice, specifically the right to a fair opportunity of hearing, as argued by the petitioner? The petitioner contended that no sufficient time was afforded for representation and the order lacked sufficient reasoning. The Revenue did not contest this, agreeing to a remand. 2. Whether the ex parte order dated February 20, 2019, passed by the Assistant Commissioner of State Taxes is liable to be quashed for being passed in violation of principles of natural justice and lacking sufficient reasoning to determine the amount due, as argued by the petitioner? The petitioner argued that the order did not adjudicate on the facts and circumstances. The Revenue agreed to a remand. 3. Whether the notice for bank account attachment dated August 4, 2022, issued under Section 79 of the CGST Act and Bihar Act, is liable to be quashed as it is consequential to the impugned ex parte orders? The petitioner sought to restrain recovery based on these orders. The Revenue agreed to a remand.