M/S Chanda Yadav vs. The State Of Bihar

Held

The Court held that the writ petition could be entertained despite the availability of statutory remedies due to apparent illegality in the orders. Two primary reasons were cited: (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 present their case, and (b) the ex parte nature of the orders, which lacked sufficient reasoning to determine the amount due. The Court found that such orders, entailing civil consequences, were bad in law on these grounds alone. Consequently, all impugned orders were quashed and set aside. The Court directed the petitioner to deposit 10% of the total demand amount within four weeks, in addition to any amount already deposited as a prerequisite for appeal. Bank accounts attached were to be de-frozen immediately. The petitioner was directed to appear before the Assessing Authority on 04.01.2022, and the Assessing Authority was directed to decide the case on merits after complying with 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 during this period. The Court explicitly stated that no opinion was expressed on the merits of the case, and all issues were left open.

Facts

The petitioner, M/s Chanda Yadav, filed a writ petition challenging multiple orders. These included an order dated 03.03.2020 by the Joint Commissioner of State Tax, Munger Circle, under Section 74(1) of the Bihar Goods and Services Tax Act, 2017, and a summary of order dated 05.03.2020 under Rule 142(5). The petitioner also challenged appellate orders dated 25.02.2021 and 04.10.2021 passed by the Additional Commissioner of State Taxes (Appeals), Bhagalpur Division, which rejected their appeal on grounds of delay and a subsequent request for rectification. The petitioner sought to quash these orders, declare the proceedings illegal and premature, and restrain coercive recovery of the demanded amount. The revenue stated it had no objection if the matter was remanded for fresh decision on merits, with no coercive steps during pendency.

Key Issues

1. Whether the original order dated 03.03.2020 passed by the Joint Commissioner of State Tax, Munger Circle, is cryptic, nonspeaking, and violative of principles of natural justice, specifically the right to a fair opportunity of hearing, as argued by the petitioner. 2. Whether the proceedings initiated under Section 74 of the Bihar Goods and Services Tax Act, 2017, were illegal and premature due to the non-invocation of Section 61 prior to their initiation, as contended by the petitioner. 3. Whether the recovery action taken under Section 79(1)(c) of the Bihar Goods and Services Tax Act, 2017, was illegal and without jurisdiction due to non-compliance with the proviso to Section 78, as argued by the petitioner. Contentions: Petitioner: Argued that the original order was nonspeaking and violative of natural justice. Contended that Section 61 should have been invoked before Section 74 proceedings, making them premature. Also argued that recovery under Section 79 was illegal due to non-compliance with Section 78's proviso. Revenue: Did not contest the quashing of orders and agreed to a remand for fresh decision on merits, with no coercive steps during the pendency of the case.