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

Facts

The petitioner, Raj Kumar Singh Raja Construction Private Limited, challenged an order dated March 7, 2020, passed by the Joint Commissioner of State Tax, Danapur Circle, Patna, under Section 74 of the Bihar Goods and Services Tax Act, 2017, for the tax period March 2019. The petitioner also challenged a summary of the order in Form GST DRC-07 and an order dated February 13, 2021, by the Additional Commissioner of State Tax (Appeal), West Division, Patna, which dismissed the petitioner's appeal solely on the grounds of delay. The petitioner contended that the initial order was passed without a reasonable opportunity of being heard and without a speaking order, and the appellate order was bad in law for rejecting the appeal on limitation without considering the COVID-19 restrictions.

Held

The Court held that the impugned orders were bad in law on two primary grounds: (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 represent their case, and (b) the orders were passed ex parte without assigning sufficient reasons to justify the determination of the amount due. The Court found that the appellate order rejecting the appeal on limitation was unsustainable, especially in light of the COVID-19 restrictions which sufficiently explained the delay. Consequently, the Court quashed and set aside the order dated February 13, 2021, and the order dated March 7, 2020, along with the summary of order. The Court directed the Assessing Authority to decide the case on merits after complying with the principles of natural justice, affording adequate opportunity to all parties, and allowing them to place necessary documents. The Court also directed the de-freezing of the petitioner's bank accounts and stipulated that no coercive steps would be taken against the petitioner during the pendency of the proceedings, which were to be decided expeditiously, preferably within two months. The Court explicitly stated that it had not expressed any opinion on the merits of the case.

Key Issues

1. Whether the order dated March 7, 2020, passed by the Joint Commissioner of State Tax under Section 74 of the BGST Act, is liable to be quashed for violation of the principles of natural justice, specifically the lack of a reasonable opportunity of being heard and the absence of a speaking order? 2. Whether the appellate order dated February 13, 2021, dismissing the petitioner's appeal on the ground of delay, is sustainable, considering the COVID-19 pandemic restrictions? Petitioner's Arguments: The petitioner argued that the initial order was passed ex parte and without sufficient reasons, violating principles of natural justice. They also contended that the appellate authority erred in dismissing the appeal solely on limitation without acknowledging the delay caused by COVID-19 restrictions. Revenue's Arguments: The Revenue stated it had no objection if the matter was remanded to the Assessing Authority for a fresh decision on merits, with no coercive steps taken against the petitioner during the pendency.