Corrtech International Private Limited vs. The State Of Bihar

Facts

Corrtech International Private Limited, the petitioner, filed a writ petition challenging an order dated July 29, 2021, passed by the Additional Commissioner of State Taxes (Appeals), Purnea Division. This order rejected the petitioner's appeal against an order dated January 25, 2021, and a summary of order in Form GST DRC-07, both passed by the Deputy Commissioner of State Taxes, Purnea Circle. The petitioner contended that these orders were ex parte and passed in violation of principles of natural justice, specifically a lack of sufficient opportunity for hearing and inadequate reasoning. The Revenue, represented by the learned counsel for the State, agreed to a remand for fresh decision on merits, without objection to limitation, and undertook not to take coercive steps against the petitioner during the pendency of the case.

Held

The Court held that the impugned orders were bad in law due to violations of the principles of natural justice, specifically the lack of a fair opportunity of hearing and the ex parte nature of the proceedings without sufficient reasoning. The Court found that the authorities had not adjudicated the matter on the attending facts and circumstances. Consequently, the Court quashed and set aside the impugned order dated July 29, 2021, passed by the Additional Commissioner of State Taxes (Appeals), the order dated January 25, 2021, passed by the Deputy Commissioner of State Taxes, and the summary of order dated January 25, 2021, issued in Form GST DRC-07. The Court directed the petitioner to deposit ten percent of the total amount demanded by the Assessing Officer within four weeks, without prejudice to the rights of the parties. The Court also directed de-freezing of the petitioner's bank accounts, if attached, and ordered the Assessing Authority to decide the case on merits after complying with the principles of natural justice, affording adequate opportunity to all parties, and passing a speaking order within two months. The Court explicitly stated that it had not expressed any opinion on merits and all issues were left open. The ratio decidendi is that ex parte orders passed in violation of natural justice, without sufficient reasoning and without proper adjudication of facts, are liable to be set aside by the High Court in its writ jurisdiction.

Key Issues

1. Whether the impugned orders dated January 25, 2021, and July 29, 2021, passed by the Deputy Commissioner and Additional Commissioner of State Taxes respectively, are bad in law due to violation of the principles of natural justice, specifically the right to a fair opportunity of hearing and adequate reasoning? Petitioner's Arguments: The petitioner argued that the orders were passed ex parte, without affording sufficient time or opportunity to present their case. They contended that the orders lacked sufficient reasoning to determine the amount due and payable, and that the authorities failed to adjudicate the matter based on the attending facts and circumstances. The petitioner relied on the inherent power of the High Court to interfere in such cases, notwithstanding the availability of statutory remedies. 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. They agreed that limitation should not come in the way and that no coercive steps would be taken against the petitioner during the pendency of the case. The Revenue did not contest the petitioner's claim regarding the violation of natural justice.