M/S Shankar Prasad vs. The State Of Bihar

Held

The Court held that notwithstanding the availability of a statutory remedy, it was not precluded from interfering with the impugned orders if they were ex facie bad in law. The Court found two primary reasons for intervention: (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 ex-parte assessment order lacked sufficient reasoning to determine the amount due and payable by the assessee. The Court reasoned that an ex-parte order passed in violation of natural justice entails civil consequences. Consequently, the Court quashed and set aside the impugned order dated March 6, 2020, and the appellate order dated March 3, 2021. The Court directed the petitioner to deposit an additional ten percent of the demand within four weeks, without prejudice to their rights. The bank accounts were ordered to be unfrozen immediately. The petitioner was directed to appear before the Assessing Officer on July 26, 2021, and the Assessing Officer was directed to pass a fresh order on merits after affording adequate opportunity to all concerned, preferably within two months. The Court explicitly stated that it had not expressed any opinion on merits and all issues were left open.

Facts

The petitioner, a taxpayer, challenged 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 before the Additional Commissioner of State Taxes (Appeals), Bhagalpur Division, which was rejected on March 3, 2021, solely on the grounds of delay. The petitioner then filed a writ petition before the High Court, seeking relief against these orders. The Revenue opposed the petition, citing the availability of alternative efficacious remedies.

Key Issues

1. Whether the High Court should entertain a writ petition despite the availability of an alternative statutory remedy, given the alleged illegality of the impugned orders? 2. Whether the impugned order dated March 6, 2020, passed by the Assistant Commissioner of State Taxes, is bad in law due to a violation of the principles of natural justice, specifically the lack of a fair opportunity of hearing and insufficient time afforded to the petitioner? 3. Whether the ex-parte assessment order, which allegedly lacks sufficient reasoning for determining the amount due, is legally sustainable? Petitioner's Arguments: The petitioner contended that the orders were bad in law and that the High Court should intervene despite the statutory remedy. They argued that principles of natural justice were violated as they were not afforded a fair opportunity of hearing and insufficient time was given to present their case. They also argued that the assessment order was passed ex-parte without sufficient reasoning. Revenue's Arguments: The Revenue argued that the writ petition should be dismissed due to the availability of an equally alternative and efficacious remedy.