M/S B.R. Irrigation System vs. The State Of Bihar

Held

The Court held that the impugned order dated January 9, 2021, and the summary of order in form GST DRC-07 were bad in law due to a violation of the principles of natural justice, specifically the lack of a fair opportunity of hearing and the ex parte nature of the order which did not provide sufficient reasons for determining the amount due. The Court quashed and set aside the impugned order. The Court also directed the petitioner to deposit ten percent of the total demand within four weeks, in addition to any amount already deposited. Bank accounts of the petitioner were to be de-frozen. 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 and all issues were left open.

Facts

The petitioner, M/s B.R. Irrigation System, a partnership firm, filed a writ petition before the Patna High Court challenging an ex parte order dated January 9, 2021, and a summary of order in form GST DRC-07, passed by the Deputy Commissioner of State Taxes, Purnea Circle. The impugned order was issued under Section 73(1) of the Bihar Goods and Services Tax Act, 2017, and Rule 142(5) of the Bihar Goods and Services Tax Rules, 2017. The petitioner sought to quash this order, declare it cryptic and violative of natural justice, and restrain coercive recovery of the demanded amount. The petitioner also prayed for the refund of any amount already recovered. The Revenue stated it had no objection if the matter was remanded for fresh decision on merits, with no coercive steps during the pendency of the case.

Key Issues

1. Whether the ex parte order dated January 9, 2021, and the summary of order in form GST DRC-07, passed by the Deputy Commissioner of State Taxes, Purnea Circle, are liable to be quashed for being cryptic, non-speaking, and violative of the principles of natural justice, specifically the right to a fair opportunity of hearing, as per Section 73(1) of the Bihar Goods and Services Tax Act, 2017? 2. Whether the coercive recovery action taken under Section 79(1)(c) of the Bihar Goods and Services Tax Act, 2017, for the amount demanded in the order dated January 9, 2021, is illegal and without jurisdiction due to non-compliance with the proviso to Section 78 of the Bihar Act, 2017? Petitioner's Arguments: The petitioner argued that the impugned order was passed ex parte, lacked sufficient reasons, was cryptic, and violated principles of natural justice by not affording a fair opportunity of hearing. They also contended that recovery actions were initiated without due compliance with statutory conditions. Revenue's Arguments: The Revenue stated it had no objection to the matter being remanded to the Assessing Authority for a fresh decision on merits, and agreed that no coercive steps should be taken against the petitioner during the pendency of the case.