Rajendra Prasad Chaurasia vs. The State Of Bihar

Held

The Court quashed and set aside the impugned order dated 13.02.2021 passed by the Additional Commissioner of State Tax (Appeal) and the order dated 06.03.2020 passed by the Assistant Commissioner of State Tax, along with the DRC-07 order dated 09.03.2020. The Court found that the original orders were ex parte and passed in violation of the principles of natural justice, as no sufficient opportunity of hearing was afforded to the petitioner. The Court also noted that the appeal was rejected solely on the grounds of limitation, with the delay being sufficiently explained by COVID restrictions. The Court accepted the petitioner's statement that 10% of the total amount was deposited as a prerequisite for hearing the appeal, and directed the petitioner to deposit an additional 10% of the demand within four weeks. The Court further directed the de-freezing of the petitioner's bank accounts. The matter was remanded to the Assessing Authority 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. No opinion was expressed on the merits of the case, and all issues were left open.

Facts

The petitioner, Rajendra Prasad Chaurasia, proprietor of M/s Radha Krishna Enterprises, challenged a demand order dated 06.03.2020 and a DRC-07 order dated 09.03.2020 issued by the Assistant Commissioner of State Tax, Patna. These orders directed payment of GST on the total amount received, which was already inclusive of GST. The petitioner's appeal against these orders was rejected by the Additional Commissioner of State Tax (Appeal) on 13.02.2021, solely on the grounds of being barred by limitation. The petitioner contended that both the original demand order and the appeal rejection order were ex parte and lacked sufficient reasoning. The rejection order was also challenged for violating principles of natural justice by not providing an opportunity of hearing.

Key Issues

1. Whether the appeal rejection order dated 13.02.2021, passed by the Additional Commissioner of State Tax (Appeal), is liable to be quashed for violating the principles of natural justice by rejecting the appeal without granting an opportunity of hearing to the petitioner, as stipulated under Article 14 of the Constitution of India? 2. Whether the demand order dated 06.03.2020 and DRC-07 order dated 09.03.2020, which directed the petitioner to pay GST on the total amount received (inclusive of GST), are arbitrary and legally unsustainable? Petitioner's Contentions: The petitioner argued that both the demand order and the appeal rejection order were passed ex parte and lacked sufficient reasoning. The rejection of the appeal without a hearing violated the principles of natural justice and Article 14 of the Constitution. The petitioner also contended that the demand was raised on a total amount that already included GST, which is impermissible. Revenue's Contentions: 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.