M/S Paras Kumar Singh vs. The State Of Bihar

Held

The Court held that notwithstanding the availability of statutory remedies, it was not precluded from interfering where an order is ex facie bad in law. The Court found two primary reasons for interference: (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 ex parte assessment order lacked sufficient reasoning to determine the amount due and payable. The Court reasoned that an ex parte order passed in violation of natural justice principles entails civil consequences. Therefore, on these grounds alone, the Court quashed and set aside the impugned assessment order dated March 6, 2020, the summary of order in Form GST DRC-07, and the appellate order dated February 27, 2021. The Court directed the petitioner to deposit an additional ten percent of the demand within four weeks, without prejudice to the parties' rights. The bank account attachment was ordered to be de-frozen immediately. The Assessing Officer was directed to pass a fresh order after affording adequate opportunity to all concerned, including the petitioner, and to decide the matter on merits expeditiously, preferably within two months from the petitioner's appearance. The Court explicitly stated that it had not expressed any opinion on merits and all issues were left open.

Facts

The petitioner filed a writ petition challenging an order dated March 6, 2020, passed by the Assistant Commissioner of State Taxes, Munger Circle, under Section 74 of the Bihar Goods And Service Tax Act, 2017. This order led to the attachment of the petitioner's bank account(s). Subsequently, the petitioner filed an appeal against this order, which was rejected by the Additional Commissioner of State Taxes (Appeals) on February 27, 2021, solely on the ground of delay. The Revenue opposed the writ petition, citing the availability of an alternative efficacious remedy. The High Court noted that the impugned order was passed ex parte and in violation of principles of natural justice, as the petitioner was not afforded sufficient time to present their case.

Key Issues

1. Whether the impugned order dated March 6, 2020, passed by the Assistant Commissioner of State Taxes under Section 74 of the Bihar Goods And Service Tax Act, 2017, is bad in law due to violation of principles of natural justice, specifically the right to a fair opportunity of hearing? (Question of law) 2. Whether the appellate order dated February 27, 2021, rejecting the petitioner's appeal solely on the ground of delay, is sustainable in light of the alleged procedural irregularities in the original assessment order? (Question of mixed law and fact) Petitioner's arguments: The petitioner contended that the original assessment order was passed ex parte without sufficient opportunity for them to present their case, thus violating principles of natural justice. They also argued that the appellate order, which rejected their appeal solely on delay, was unsustainable given the fundamental flaws in the original order. Revenue's arguments: The Revenue opposed the writ petition on the ground that an equally alternative efficacious remedy was available to the petitioner.