M/S Maruti Enterprises vs. The State Of Bihar

Facts

The petitioner, M/s Maruti Enterprises, filed a writ petition challenging an order dated August 18, 2022, passed by the Additional Commissioner of State Taxes (Appeals), Patna. This appellate order had rejected the petitioner's appeal against an order dated December 3, 2021, passed by the Assistant Commissioner of State Tax, Patna North Circle. The original order and a summary of order in form GST DRC-07 were also challenged. The petitioner contended that both the original order and the appellate order were ex parte and lacked sufficient reasoning. The Revenue, through its counsel, agreed to a remand of the matter to the Assessing Authority for a fresh decision on merits, without limitation being a bar, and without coercive steps against the petitioner.

Held

The Court held that the writ petition was maintainable despite the availability of statutory remedies, as the orders appeared ex facie bad in law. The Court found two primary reasons for interference: (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 ex parte nature of the orders which did not provide sufficient reasoning for determining the amount due. The Court also noted that the authorities had not adjudicated the matter on the attending facts and circumstances. Consequently, the Court quashed and set aside the impugned appellate order dated August 18, 2022, and the original order dated December 3, 2021, along with the summary of order in form GST DRC-07. The Court directed the petitioner to deposit an additional ten percent of the demand within four weeks, without prejudice to the parties' rights. Bank accounts were ordered to be de-frozen. The Assessing Authority was directed to decide the case on merits after complying with principles of natural justice, affording adequate opportunity to all parties, and passing 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 the merits of the case and all issues were left open.

Key Issues

1. Whether the appellate order dated August 18, 2022, passed by the Additional Commissioner of State Taxes (Appeals) is bad in law due to violation of principles of natural justice, specifically the lack of a fair opportunity of hearing and insufficient time afforded to the petitioner to represent its case? 2. Whether the ex parte orders passed by the authorities lacked sufficient reasoning to determine the amount due and payable by the assessee, and failed to adjudicate on the attending facts and circumstances? Petitioner's Arguments: The petitioner argued that the orders were ex parte, passed without affording a fair opportunity of hearing, and lacked sufficient reasons. The petitioner also stated that ten percent of the total disputed amount, a prerequisite for appeal hearing, had already been deposited. Revenue's Arguments: The Revenue stated it had no objection if the matter was remanded to the Assessing Authority for deciding the case afresh on merits, with limitation not being a bar, and without coercive steps against the petitioner. The Revenue did not contest the petitioner's claim of having deposited ten percent of the disputed amount.