M/S Ghar Ghar Ki Awaz vs. The State Of Bihar

Facts

The petitioner, M/s Ghar Ghar Ki Awaz, through its proprietor Mohammad Nauhsad, filed a writ petition before the Patna High Court challenging an ex parte order dated January 9, 2021, passed by the Assistant Commissioner of State Tax, North Circle, Patna. This order, along with a Summary of Order in Form GST DRC-07, was issued by Respondent No. 3. The petitioner contended that the order was passed without sufficient opportunity for them to present their case, violating principles of natural justice. The revenue, represented by the State, agreed to a remand of the matter to the Assessing Authority for a fresh decision on merits, with no coercive steps to be taken against the petitioner during the pendency of the proceedings.

Held

The Court held that the impugned order dated January 9, 2021, passed by the Assistant Commissioner of State Tax, North Circle, Patna, was bad in law for two primary reasons: (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 ex parte and lacking sufficient reasoning to decipher how the officer determined the amount due. The Court found that the authorities had not adjudicated the matter on the attending facts and circumstances, and all issues of fact and law ought to have been dealt with. Consequently, the Court quashed and set aside the impugned order and the Summary of Order in Form GST DRC-07. The Court directed the petitioner to deposit 20% of the demand within four weeks, without prejudice to their rights. The bank accounts of the petitioner were to be de-frozen immediately. The Assessing Authority was directed to decide the case on merits after complying with the principles of natural justice, affording opportunities for hearing and submission of documents, and to pass a speaking order within two months of the petitioner's appearance. No coercive steps were to be taken against the petitioner during this period. The Court explicitly stated that it had not expressed any opinion on merits and all issues were left open.

Key Issues

1. Whether the ex parte order dated January 9, 2021, passed by the Assistant Commissioner of State Tax, North Circle, Patna, is bad in law due to violation of the 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 reasoning for determining the amount due and payable by the assessee, is liable to be quashed, as contended by the petitioner? Petitioner's Arguments: The petitioner argued that the order was ex parte and passed without affording sufficient time to represent their case, thus violating the principles of natural justice. They also contended that the order lacked adequate reasoning to justify the determined tax liability. Revenue's Arguments: The learned counsel for the Revenue stated they had no objection if the matter was remanded to the Assessing Authority for deciding the case afresh on merits.