Rajeev Kumar vs. State Of Bihar Through The Commissioner Of State Tax

Facts

The petitioner, Rajeev Kumar, filed a writ petition before the Patna High Court challenging orders dated 03.03.2020 and 02.03.2020, and a summary of order in Form GST DRC-07 dated 03.03.2020, all passed by the Assistant Commissioner of State Tax, Muzaffarpur East, for the tax period August 2019. The petitioner contended that these orders were passed without granting a reasonable opportunity of being heard and without passing a speaking order. The revenue, represented by the State of Bihar through the Commissioner of State Tax, stated it had no objection if the matter was remanded to the Assessing Authority for fresh decision on merits, and no coercive steps would be taken against the petitioner during the pendency of the case. The Court considered the matter despite the availability of statutory remedies.

Held

The Court quashed and set aside the impugned orders dated 03.03.2020 and 02.03.2020, and the summary of order in Form GST DRC-07 dated 03.03.2020, passed by the Assistant Commissioner of State Tax. The primary reasons for this decision were the violation of the principles of natural justice, specifically the failure to provide a fair opportunity of hearing to the petitioner and the passing of ex parte orders without sufficient reasoning. The Court noted that such violations entail civil consequences. The Court directed the petitioner to deposit twenty percent of the demand amount within four weeks, without prejudice to the rights and contentions of the parties. The bank accounts of the petitioner were to be de-frozen immediately. The petitioner was directed to appear before the Assessing Authority on 28th January 2022, and 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 this period. 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 orders dated 03.03.2020 and 02.03.2020, and the summary of order in Form GST DRC-07 dated 03.03.2020, passed by the Assistant Commissioner of State Tax, Muzaffarpur East, for the tax period August 2019, are liable to be quashed for violation of the principles of natural justice, specifically the lack of a reasonable opportunity of being heard and the absence of a speaking order, as per Section 74 of the Bihar Goods and Services Tax Act, 2017 (BGST Act)? Petitioner's contention: The impugned orders were passed without affording a reasonable opportunity of hearing and without passing a speaking order, thus violating principles of natural justice. The orders were ex parte and lacked sufficient reasoning to determine the amount due. Revenue's contention: The Revenue had no objection to the matter being remanded to the Assessing Authority for a fresh decision on merits, and agreed that no coercive steps would be taken against the petitioner.