M/S Hanif Ahmad vs. The State Of Bihar

Held

The Court held that the impugned order dated 04.03.2020, passed by the Assistant Commissioner of State Tax, Kadamkuan Circle, Patna, was bad in law due to a clear violation of the principles of natural justice. The Court found that the petitioner was not afforded a sufficient opportunity of hearing and that the order was passed ex parte without adequate reasons to determine the amount due. Consequently, the Court quashed and set aside the impugned order. The Court directed the petitioner to deposit twenty percent of the demand within four weeks, without prejudice to their rights. The Court also ordered the immediate defreezing of the petitioner's bank account. The Assessing Authority was directed to decide the case afresh on merits, complying with the principles of natural justice, affording parties an opportunity to present documents, and passing a speaking order within two months of the petitioner's appearance. No coercive steps are to be taken against the petitioner during this period. The Court explicitly stated that no opinion was expressed on the merits of the case, and all issues were left open.

Facts

The petitioner, M/s Hanif Ahmad, filed a writ petition challenging an order dated 04.03.2020 passed by the Assistant Commissioner of State Tax, Kadamkuan Circle, Patna. The impugned order rejected the petitioner's input tax credit claim and imposed a tax demand of Rs. 75,57,386.00, including interest and penalty. The petitioner contended that this order was passed without providing an opportunity of hearing, thereby violating the principles of natural justice. The petitioner also sought the defreezing of their bank account. The Revenue, represented by the learned counsel for the State, stated they had no objection if the matter was remanded to the Assessing Authority for a fresh decision on merits, with no coercive steps taken against the petitioner during the pendency of the case.

Key Issues

1. Whether the impugned order dated 04.03.2020, passed by the Assistant Commissioner of State Tax, Kadamkuan Circle, Patna, is liable to be quashed for violation of the principles of natural justice, specifically the right to a fair opportunity of hearing, as argued by the petitioner? The petitioner contends that the order was passed ex parte without sufficient notice or opportunity to represent their case. The Revenue stated no objection to a remand for fresh adjudication. 2. Whether the bank account of the petitioner should be defrozen, as prayed by the petitioner? The petitioner sought this relief in conjunction with quashing the impugned order. The Revenue did not specifically address this point in their submissions but agreed to the overall terms of remand and no coercive steps.