M/S Shiv Krishna Enterprises vs. The State Of Bihar

Held

The Court quashed and set aside the impugned orders dated 09.01.2020 and 26.08.2019 passed by the Joint Commissioner of State Taxes. The Court found that the orders were bad in law due to a violation of the principles of natural justice, specifically the lack of a fair opportunity of hearing afforded to the petitioner and the ex parte nature of the orders which lacked sufficient reasoning. The Court accepted the petitioner's undertaking to deposit an additional ten percent of the demand raised before the Assessing Officer within four weeks, without prejudice to the rights of the parties and subject to the final order. The Court also directed the de-freezing of the petitioner's bank accounts. The Assessing Authority was directed to decide the case on merits after complying with the principles of natural justice, affording adequate opportunity to all concerned, and preferably within two months from the petitioner's appearance. The Court explicitly stated that it had not expressed any opinion on the merits of the case and all issues were left open. The proceedings were to be conducted through digital mode if possible during the pandemic.

Facts

The petitioner, M/s Shiv Krishna Enterprises, filed a writ petition challenging orders passed by the Assistant Commissioner of State Taxes and the Additional Commissioner of State Taxes (Appeals). The impugned orders, dated 09.01.2020 and 10.02.2020, were passed under Section 74(1) of the Bihar Goods & Service Tax Act, 2017, imposing tax, penalty, and interest for the period April 2019 to November 2019. A subsequent order dated 06.03.2020 by the Additional Commissioner dismissed the petitioner's appeal. The petitioner contended that these orders were passed without following due procedure for non-filing of returns and in violation of principles of natural justice. The Revenue stated it had no objection if the matter was remanded to the Assessing Authority for a fresh decision.

Key Issues

1. Whether the impugned orders dated 09.01.2020 and 10.02.2020, passed by the Assistant Commissioner of State Taxes, imposing tax, penalty, and interest for non-filing of returns for the period April 2019-November 2019, were passed in disregard to the prescribed procedure under the Bihar Goods and Services Tax Act, 2017 and relevant circulars, thereby violating the principles of natural justice by not affording a fair opportunity of hearing and passing ex parte orders without sufficient reasoning? 2. Whether the impugned order dated 06.03.2020, passed by the Additional Commissioner of State Taxes (Appeals), dismissing the petitioner's appeal, was liable to be quashed for disregarding the provisions and procedure pertaining to non-filing of returns? Petitioner's Arguments: The petitioner argued that the orders were passed in violation of the principles of natural justice, specifically by not providing sufficient time for representation and by passing ex parte orders without adequate reasoning for determining the tax liability. The petitioner also contended that the procedure followed was not in accordance with the Act and circulars for cases of non-filing of returns. 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.