Hav Automobiles PVT. LTD. vs. The State Of Bihar

Facts

HAV Automobiles Pvt. Ltd. (the petitioner) filed a writ petition before the Patna High Court challenging an appellate order dated January 13, 2021, passed by the Additional Commissioner of State Taxes (Appeals), Patna West (respondent no. 2). This appellate order had rejected the petitioner's appeal against an ex-parte order dated August 8, 2019, and a summary of order in Form GST DRC-07 dated August 14, 2019, passed by the Deputy Commissioner of State Taxes, Patna Central Circle (respondent no. 3). The original order under Section 73 of the Bihar Goods and Services Tax Act, 2017, pertained to the tax period April 2018 to March 2019. The petitioner contended that the appellate order was ex-parte and violative of natural justice. The Revenue stated it had no objection if the matter was remanded for fresh decision on merits, with no coercive steps during pendency.

Held

The Court held that the appellate order dated January 13, 2021, and the original order dated August 8, 2019, along with the summary of order dated August 14, 2019, were bad in law due to a violation of the principles of natural justice, specifically the lack of a fair opportunity of hearing afforded to the petitioner. The Court noted that the ex-parte nature of the orders, which entail civil consequences, was sufficient ground for interference. The Court quashed and set aside both the appellate order and the original orders. It directed the petitioner to deposit 10% of the total demand amount before the Assessing Officer within four weeks, in addition to any amount already deposited as a prerequisite for appeal hearing. The bank accounts of the petitioner, if attached, were to be de-frozen immediately. The Assessing Authority was directed to decide the case on merits after complying with the principles of natural justice, affording adequate opportunity to all parties, and passing a speaking order within two months of the petitioner's appearance. No coercive steps were to be taken against the petitioner during the pendency of the proceedings. The Court explicitly stated that it had not expressed any opinion on the merits of the case, leaving all issues open.

Key Issues

1. Whether the appellate order dated January 13, 2021, passed by the Additional Commissioner of State Taxes (Appeals) is liable to be quashed for being ex-parte and violative of the principles of natural justice, as argued by the petitioner, relying on the lack of sufficient opportunity for hearing and the non-speaking nature of the order? 2. Whether the original ex-parte order dated August 8, 2019, and the summary of order in Form GST DRC-07 dated August 14, 2019, passed by the Deputy Commissioner of State Taxes are liable to be quashed for being passed in violation of natural justice and without sufficient reasons to determine the amount due, as contended by the petitioner? The Revenue did not contest the petitioner's arguments regarding the violation of natural justice and the ex-parte nature of the orders, agreeing to a remand for a fresh decision on merits.