Raj Kumar Singh Raja Construction Private Limited vs. State Of Bihar

Facts

The petitioner, Raj Kumar Singh Raja Construction Private Limited, challenged orders passed by the Joint Commissioner of State Tax (Respondent No. 3) and the Additional Commissioner of State Tax (Appeal) (Respondent No. 2). The primary order dated 07.03.2020, passed under Section 74 of the Bihar Goods and Services Tax Act, 2017, pertained to the tax period August 2019. The petitioner contended that this order was passed without a reasonable opportunity of being heard and without a speaking order. The appeal filed against this order was dismissed by Respondent No. 2 on 13.02.2021, solely on the grounds of delay. The petitioner sought to quash these orders and sought other reliefs.

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 07.03.2020 passed by the Joint Commissioner of State Tax, along with the summary of order in Form GST DRC-07. The Court found that the initial order was bad in law due to a violation of the principles of natural justice, specifically the lack of a fair opportunity of hearing and the passing of an ex parte order without sufficient reasons. The Court also noted that the appellate order dismissing the appeal on delay was unsustainable, especially in light of COVID restrictions. The Court directed the petitioner to deposit 10% of the total amount (if not already deposited) and an additional 10% of the demand raised before the Assessing Officer within four weeks. The bank accounts of the petitioner were ordered 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 preferably within two months from the petitioner's appearance. No coercive steps were to be taken against the petitioner during the pendency of the proceedings. The Court explicitly stated that it had not expressed any opinion on merits and all issues were left open.

Key Issues

1. Whether the order dated 07.03.2020 passed by the Joint Commissioner of State Tax under Section 74 of the BGST Act is liable to be quashed for violation of principles of natural justice, specifically the lack of a reasonable opportunity of being heard and for not being a speaking order? 2. Whether the order dated 13.02.2021 passed by the Additional Commissioner of State Tax (Appeal) dismissing the petitioner's appeal in limine on the ground of delay is sustainable, considering the circumstances, including COVID restrictions? Petitioner's Arguments: The petitioner argued that the initial order was passed ex parte without affording a fair opportunity of hearing and lacked sufficient reasoning. The appellate order was also flawed as it dismissed the appeal solely on delay without considering the explanation provided, which was attributed to COVID restrictions. Revenue's Arguments: The learned counsel for the Revenue stated no objection if the matter was remanded to the Assessing Authority for fresh decision on merits.