Navodit Projects Private Limited vs. The State Of Bihar

Held

The Court held that the impugned assessment and demand orders dated January 15, 2021, passed by the Joint Commissioner of Commercial State Tax, Darbhanga Circle, were bad in law due to a violation of the principles of natural justice. The Court found that the petitioner was not afforded a fair opportunity of hearing and that the ex parte orders lacked sufficient reasoning. Consequently, the Court quashed and set aside the impugned orders. The Court directed the petitioner to deposit twenty percent of the demand amount within four weeks, without prejudice to their rights. The bank accounts of the petitioner were ordered to be de-frozen. The Assessing Authority was directed to decide the case afresh on merits after complying with the principles of natural justice, affording opportunity to all parties, and passing a speaking order within two months of the petitioner's appearance. No opinion was expressed on the merits of the case, and all issues were left open.

Facts

The petitioner, Navodit Projects Private Limited, challenged assessment and demand orders dated January 15, 2021, passed by the Joint Commissioner of Commercial State Tax, Darbhanga Circle. These orders rejected the petitioner's input tax credit claim and imposed a tax demand of Rs. 36,42,526.04, including interest and penalty, for the period October 2019 to March 2020. The petitioner contended that these orders were passed without providing adequate notice or a sufficient opportunity to be heard, violating principles of natural justice. The Revenue, represented by the Joint Commissioner, agreed to a remand for fresh adjudication.

Key Issues

1. Whether the assessment and demand orders dated January 15, 2021, passed by the Joint Commissioner of Commercial State Tax, Darbhanga Circle, are liable to be quashed on the ground of violation of principles of natural justice, specifically the lack of adequate opportunity of hearing to the petitioner? Petitioner's contention: The petitioner argued that the impugned orders were passed ex parte and in violation of the principles of natural justice, as no sufficient opportunity was afforded to them to represent their case. They further contended that the orders lacked sufficient reasoning to justify the determined amount due. Revenue's contention: The Revenue stated that they had no objection if the matter was remanded to the Assessing Authority for deciding the case afresh on merits, and no coercive steps would be taken against the petitioner during the pendency of the case.