Bindeshwar Yadav Construction PVT. LTD. vs. The State Of Bihar

Held

The Court held that the order dated 07.08.2019, passed by the Assistant Commissioner of State Taxes, suffered from violations of the principles of natural justice on three counts: (a) it did not assign any reason, (b) no adequate opportunity of hearing was afforded to the petitioner, and (c) the petitioner was made liable to suffer civil and penal consequences without due process. The Court noted that the petitioner was notified via email, but the email was handled by a former employee who did not inform the petitioner. Subsequent adjournments were made without issuing fresh notices for appearance. The basis for determining the amount of Rs. 20,00,000/- was also not decipherable from the record. Consequently, on these grounds alone, the impugned order dated 07.08.2019 was quashed and set aside. The Court directed the Assistant Commissioner to decide the matter afresh by a speaking order, assigning reasons and affording adequate opportunity of hearing to the petitioner. The petitioner was directed to appear on 15.01.2021, with proceedings to be conducted digitally if possible. Liberty was reserved for the petitioner to pursue alternative remedies. The Court explicitly stated it had not expressed any opinion on the merits of the case.

Facts

The petitioner, Bindeshwar Yadav Construction Pvt. Ltd., filed a writ petition challenging a letter dated 09.02.2020 issued by the Assistant Commissioner of State Taxes, Jhanjharpur Circle, Madhubani. This letter, purportedly under Section 79 of the Bihar Goods and Services Tax Act, 2017, instructed the petitioner's employer department to withhold/remit a sum of Rs. 23,22,713/-. The petitioner contended that no such tax liability was due or pending against them. The petition also sought to declare the letter illegal and without jurisdiction, and to restrain its enforcement. The Court noted that the earlier order dated 07.08.2019, which likely formed the basis for the Section 79 instruction, suffered from violations of natural justice, including lack of reasons, inadequate opportunity of hearing, and unclear basis for the amount determined.

Key Issues

1. Whether the letter dated 09.02.2020, issued under Section 79 of the Bihar Goods and Services Tax Act, 2017, directing withholding of Rs. 23,22,713/- from the petitioner, is illegal and without jurisdiction? Petitioner's Arguments: The petitioner argued that the impugned letter was misconceived, illegal, and without jurisdiction. They contended that no tax liability was due or pending against them, making the instruction to withhold funds unjustified. Furthermore, the underlying order dated 07.08.2019, which led to the Section 79 notice, was passed in violation of principles of natural justice, as it lacked reasons, denied adequate opportunity of hearing, and did not clearly establish the basis for the determined amount. Revenue's Arguments: The judgment does not record any specific arguments made by the revenue or state respondents.