M/S Deepak Raj Navratan Hata vs. The State Of Bihar

Facts

The petitioner, M/s Deepak Raj Navratan Hata, challenged orders passed by the revenue authorities. The first order, dated January 11, 2021, was issued by the Joint Commissioner of State Taxes, Purnea, under Section 73(1) of the Bihar Goods and Services Tax Act, 2017, along with a summary of order in Form GST DRC-07 dated January 12, 2021, for the tax period October 2019 to March 2020. The petitioner's appeal against this order was rejected by the Additional Commissioner of State Taxes (Appeals), Purnea Division, through an order dated August 17, 2021. The petitioner contended that these orders were cryptic, non-speaking, violative of natural justice, and that the proceedings under Section 73 were premature due to non-invocation of Section 61.

Held

The Court held that the impugned orders were bad in law for two primary reasons: (a) violation of the principles of natural justice, specifically the lack of a fair opportunity of hearing and insufficient time afforded to the petitioner to represent their case, and (b) the orders being ex parte in nature and lacking sufficient, decipherable reasons for determining the amount due. The Court found that the authorities had not adjudicated the matter on the attending facts and circumstances, and all issues of fact and law ought to have been dealt with, even in ex parte proceedings. Consequently, the Court quashed and set aside the impugned order dated August 17, 2021, passed by the Additional Commissioner of State Taxes (Appeals), and the order dated January 11, 2021, and the summary of order dated January 12, 2021, passed by the Joint Commissioner of State Taxes. The matter was remanded to the Assessing Authority for a fresh decision on merits after complying with the principles of natural justice, with directions for deposits, de-freezing of bank accounts, and expeditious disposal 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 orders passed by the Joint Commissioner and the Additional Commissioner of State Taxes are violative of the principles of natural justice, specifically the right to a fair opportunity of hearing and adequate reasons for the decision? (Relates to principles of natural justice and Section 73 of the Bihar Goods and Services Tax Act, 2017). Petitioner's Arguments: The petitioner argued that the orders were cryptic, misconceived, non-speaking, and violated principles of natural justice. They contended that insufficient time was given for representation, and the orders were passed ex parte without sufficient reasoning to determine the amount due. Furthermore, the petitioner argued that the proceedings under Section 73 of the Bihar Act, 2017, were illegal and premature because Section 61 of the Act was not invoked prior to initiating the Section 73 proceedings. 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, and that no coercive steps would be taken against the petitioner during the pendency of the case.