M/S Pramod Khad Bhandar vs. The Union Of INDIA

Held

The Court held that the impugned order dated March 5, 2020, passed by the Assistant Commissioner of State Taxes, Sasaram Circle, Sasaram, under Section 73 of the State Act, and the summary of order issued in Form GST DRC-07, was bad in law on two grounds: (a) violation of the principles of natural justice, specifically the lack of a fair opportunity of hearing and insufficient time afforded to the petitioner, and (b) the order being passed ex parte without sufficient reasons decipherable from the record as to how the amount due was determined. The Court found that such an order, entailing civil consequences, could be interfered with notwithstanding the statutory remedy. Consequently, the Court quashed and set aside the impugned order. The Court also directed the de-freezing/de-attaching of the petitioner's bank accounts. The petitioner was directed to deposit an additional ten percent of the demand amount within four weeks, without prejudice to their rights. The Assessing Officer was directed to pass a fresh order after affording adequate opportunity to all concerned, 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 5, 2020, passed by the Assistant Commissioner of State Taxes, Sasaram Circle, Sasaram, under Section 73 of the State Act, along with a summary of order in Form GST DRC-07. The petitioner's bank accounts were also attached post the impugned order. The Revenue contended that the petitioner had an alternative efficacious remedy of filing an appeal under the Bihar Goods and Services Tax Act, 2017. The petitioner confined his relief to specific prayer clauses, reserving liberty to press others later. The Court noted that the impugned order was passed ex parte and allegedly in violation of principles of natural justice, as the petitioner was not afforded sufficient time to represent their case.

Key Issues

1. Whether the impugned order dated March 5, 2020, passed by the Assistant Commissioner of State Taxes, Sasaram Circle, Sasaram, under Section 73 of the State Act, and the summary of order in Form GST DRC-07, is bad in law due to violation of principles of natural justice, specifically the right to a fair opportunity of hearing, as argued by the petitioner? 2. Whether the ex parte order, which allegedly lacks sufficient reasons for determining the amount due and payable by the assessee, warrants interference by the High Court despite the existence of an alternative statutory remedy of appeal, as argued by the petitioner? Petitioner's Contention: The petitioner argued that the order was passed in violation of the principles of natural justice, as they were not given a fair opportunity of hearing and sufficient time to present their case. They also contended that the ex parte order lacked sufficient reasoning. Revenue's Contention: The Revenue argued that the petitioner had an equally alternative efficacious remedy of filing an appeal under the provisions of the Bihar Goods and Services Tax Act, 2017.