M/S Agarwal Trading vs. The State Of Bihar

Facts

The petitioner, M/s Agarwal Trading, challenged two orders: one dated 20.02.2020 by the Assistant Commissioner of State Taxes (Respondent No. 3) under Section 73 of the Bihar Goods And Services Tax Act, 2017, and another dated 04.10.2021 by the Additional Commissioner of State Taxes (Appeals) (Respondent No. 2) rejecting the petitioner's appeal against the first order. The petitioner alleged that both orders were cryptic, non-speaking, and violative of the principles of natural justice, particularly regarding the opportunity of hearing. The tax period in dispute was October 2018, and the orders pertained to demand of tax, interest, and penalty. The petitioner sought quashing of these orders and a restraint on coercive recovery.

Held

The Court held that the impugned orders were bad in law due to two primary reasons: violation of the principles of natural justice, specifically the lack of a fair opportunity of hearing and insufficient time afforded to the petitioner, and the ex parte nature of the orders which lacked sufficient reasoning for determining the amount due. The Court found that the authorities had not adjudicated the matter on the attending facts and circumstances, failing to deal with all issues of fact and law. Consequently, the Court quashed and set aside both the order dated 04.10.2021 passed by the Additional Commissioner of State Taxes (Appeals) and the order dated 20.02.2020 passed by the Assistant Commissioner of State Taxes. The Court directed the Assessing Authority to decide the case afresh on merits after complying with the principles of natural justice, affording adequate opportunity of hearing and allowing parties to place essential documents. No coercive steps were to be taken against the petitioner during this period, and the Assessing Authority was to pass a speaking order expeditiously, preferably within two months. The Court explicitly stated that it had not expressed any opinion on merits and all issues were left open.

Key Issues

1. Whether the order dated 20.02.2020 passed by the Assistant Commissioner of State Taxes under Section 73 of the Bihar Act 2017, and the order dated 04.10.2021 passed by the Additional Commissioner of State Taxes (Appeals), are unsustainable in law for being cryptic, non-speaking, and violative of the principles of natural justice, specifically the right to a fair opportunity of hearing? Petitioner's Arguments: The petitioner argued that both impugned orders were highly cryptic, misconceived, non-speaking, and violated the principles of natural justice. They contended that insufficient time was provided for representation and that the orders were passed ex parte without sufficient reasoning to determine the amount due. The petitioner also argued that the authorities failed to adjudicate the matter on the attending facts and circumstances. Revenue's Arguments: 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. They also agreed that no coercive steps would be taken against the petitioner during the pendency of the case.