Singh Caterers And Vendors vs. The State Of Bihar

Held

The Court quashed and set aside the impugned order dated March 1, 2021, passed by the Joint Commissioner of State Tax. The Court found the order to be bad in law primarily on two grounds: (a) violation of the principles of natural justice, as the petitioner was not afforded a fair opportunity of hearing and sufficient time to represent their case, and (b) the order was passed ex parte without assigning sufficient reasons to determine the amount due. The Court accepted the petitioner's statement that 10% of the total amount had already been deposited and directed the petitioner to deposit an additional 10% of the demand within four weeks, without prejudice to their rights. The bank account was ordered to be de-frozen/de-attached immediately. The petitioner was directed to appear before the Assessing Authority on August 9, 2021, and the authority was directed to decide the case on merits within three months after complying with the principles of natural justice, affording adequate opportunity to all concerned, and without taking coercive steps during the pendency. The Court explicitly stated that it had not expressed any opinion on merits and all issues were left open.

Facts

The petitioner, Singh Caterers and Vendors, filed a writ petition before the Patna High Court challenging a notice dated March 1, 2021, issued by the Joint Commissioner of State Tax, Kadam Kuan Circle, Patna. This notice, under Section 79 of the Bihar Goods and Services Tax Act, 2017, directed the Indian Bank to attach the petitioner's account for payment of Rs. 1,46,88,724/-. The petitioner sought a writ of mandamus to direct the respondent to consider their application for rectification of errors under Section 161 of the Act and a writ of certiorari to quash the attachment notice. The petitioner contended that they were not afforded a fair opportunity of hearing and that the order lacked sufficient reasoning. The revenue stated they had no objection if the matter was remanded to the assessing authority for fresh decision on merits, with no coercive steps during pendency.

Key Issues

1. Whether the notice dated March 1, 2021, issued under Section 79 of the Bihar Goods and Services Tax Act, 2017, for attachment of the petitioner's bank account is bad in law due to violation of principles of natural justice, specifically the lack of a fair opportunity of hearing and insufficient reasoning. Petitioner's Arguments: The petitioner argued that the impugned order was passed ex parte without providing sufficient time to represent their case and that the order lacked decipherable reasoning on how the amount due was determined. They relied on the general principles of natural justice. Revenue's Arguments: The revenue did not contest the petitioner's claims regarding procedural irregularities and agreed to a remand for fresh consideration on merits, with no coercive steps during the pendency of the case.