M/S Shankar Prasad vs. The State Of Bihar

Held

The Court held that notwithstanding the statutory remedy, it was not precluded from interfering where an order is ex facie bad in law. The Court found two primary reasons to interfere: (a) violation of the principles of natural justice, specifically the lack of a fair opportunity of hearing, as the petitioner was not afforded sufficient time to represent their case; and (b) the ex parte assessment order lacked sufficient reasoning, making it difficult to decipher how the officer determined the amount due. The Court concluded that an ex parte order passed in violation of natural justice principles, which entails civil consequences, could be set aside on these grounds alone. Consequently, the Court quashed the impugned order of the Assistant Commissioner and the appellate order rejecting the appeal on grounds of delay. The Court directed the petitioner to deposit an additional ten percent of the demand within four weeks, without prejudice to the rights of the parties. The bank accounts were ordered to be unfrozen immediately. The petitioner was directed to appear before the Assessing Officer on July 26, 2021, for a fresh assessment, with the Assessing Officer to pass a fresh order on merits after affording adequate opportunity to all concerned, preferably within two months. All issues were left open for determination on merits.

Facts

The petitioner filed a writ petition challenging an order dated March 1, 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). The petitioner had previously filed an appeal against this order, which was rejected by the Additional Commissioner of State Taxes (Appeals) on March 3, 2021, solely on the grounds of delay. The Revenue opposed the writ petition, citing the availability of an alternative efficacious remedy. The Court noted that the impugned order was passed ex parte and allegedly in violation of natural justice principles, with insufficient reasons provided for the demand.

Key Issues

1. Whether the impugned order dated March 1, 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 lack of a fair opportunity of hearing and insufficient reasoning for the ex parte assessment? Petitioner's arguments: The petitioner contended that they were not afforded sufficient time to present their case and that the ex parte assessment order lacked adequate reasoning to determine the amount due. They argued that such an order, entailing civil consequences, should be quashed. Revenue's arguments: The Revenue opposed the petition, primarily on the ground that an equally alternative efficacious remedy was available to the petitioner, implying the writ petition was not maintainable.