M/S Shankar Prasad vs. The State Of Bihar

Held

The High Court held that notwithstanding the availability of statutory remedies, it was not precluded from interfering with an order that was ex facie bad in law. The Court found two primary reasons for interference: (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 nature of the assessment order which did not provide sufficient reasons for determining the amount due. 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, the summary of order in Form GST DRC-07, and the appellate order dated March 3, 2021. The Court directed the de-freezing of the petitioner's bank accounts, accepted the petitioner's undertaking to deposit an additional ten percent of the demand within four weeks, and scheduled the petitioner's appearance before the Assessing Officer on July 26, 2021. The Assessing Officer was directed to pass a fresh order on merits after affording adequate opportunity to all concerned, preferably within two months of the petitioner's appearance. The Court explicitly stated that it had not expressed any opinion on the merits of the case and all issues were left open.

Facts

The petitioner, whose GSTIN is 10AKAPP4432B1Z0, challenged an order dated March 6, 2020, passed by the Assistant Commissioner of State Taxes, Munger Circle, Munger, under Section 74 of the Bihar Goods And Service Tax Act, 2017. This order was followed by a summary of order in Form GST DRC-07. Subsequently, the petitioner's bank accounts were attached. An appeal filed by the petitioner before the Additional Commissioner of State Taxes (Appeals), Bhagalpur Division, Bhagalpur, was rejected on March 3, 2021, solely on the grounds of delay. The petitioner then filed a writ petition before the High Court. 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? (Mixed question of law and fact, concerning the scope of writ jurisdiction and principles of natural justice). 2. Whether the impugned assessment order and the appellate order are liable to be quashed and set aside on grounds of violation of the principles of natural justice, specifically the lack of a fair opportunity of hearing and the ex-parte nature of the assessment order without sufficient reasoning? (Question of law, concerning principles of natural justice and statutory compliance). Petitioner's arguments: The petitioner contended that the assessment order was passed in violation of the principles of natural justice, as they were not afforded sufficient time to present their case, and the order was passed ex parte without adequate reasoning. They also highlighted that their bank accounts were attached. The petitioner stated that 10% of the total demand had already been deposited as a prerequisite for appeal. Revenue's arguments: The Revenue opposed the writ petition, arguing that an equally alternative efficacious remedy was available to the petitioner, implying the High Court should not interfere.