Tata Consultancy Service Limited vs. State Of Bihar

Facts

The petitioner, Tata Consultancy Service Limited, filed a writ petition before the Patna High Court challenging three orders: an order dated 24.02.2021 passed by the Assistant Commissioner of State Taxes (Respondent No. 3) in Form GST DRC-07, another order dated 22.06.2021 by the same authority, and an order dated 16.11.2021 passed by the Additional Commissioner of State Taxes (Appeals) (Respondent No. 2). The petitioner contended that these orders were passed in violation of the principles of natural justice, specifically that they were not afforded a fair opportunity of hearing and that the orders were passed ex parte without sufficient reasoning to determine the amount due. The Revenue stated it had no objection to the matter being remanded for fresh decision on merits, with no coercive steps to be taken against the petitioner during pendency.

Held

The Court held that the impugned orders were bad in law due to 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 to present their case, and (b) the orders were passed ex parte without assigning sufficient reasons to decipher how the officer determined the amount due. The Court noted that such ex parte orders, passed in violation of natural justice, entail civil consequences. Furthermore, the authorities failed to adjudicate 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 orders. The Court also directed the de-freezing of the petitioner's bank accounts, accepted the petitioner's undertaking to deposit a further ten percent of the demand, and directed the Assessing Authority to decide the case on merits after complying with the principles of natural justice, affording personal hearing and opportunity to submit documents, and passing a speaking order within two months. No opinion was expressed on the merits of the case, leaving all issues open.

Key Issues

1. Whether the impugned orders, passed by the Assistant Commissioner of State Taxes and the Additional Commissioner of State Taxes (Appeals), are liable to be quashed for violation of the principles of natural justice, specifically the right to a fair opportunity of hearing and the requirement for reasoned orders? (Issue of law and fact) Petitioner's Arguments: The petitioner argued that the orders were passed without complying with the principles of natural justice, as they were not given sufficient time to represent their case. They also contended that the orders were passed ex parte and lacked sufficient reasoning to justify the determined amounts due. The petitioner sought to quash these orders. Revenue's Arguments: The Revenue stated that it had no objection if the matter was remanded to the Assessing Authority for deciding the case afresh on merits. The Revenue also agreed that no coercive steps would be taken against the petitioner during the pendency of the case.