M/S Dhanvantari Medico vs. The State Of Bihar

Facts

The petitioner, M/s Dhanvantari Medico, challenged an order dated May 14, 2022, passed by the Additional Commissioner of State Taxes (Appeal), Patna West Circle, Patna. This order rejected the petitioner's appeal against an order dated September 26, 2020, passed by the Assistant Commissioner of State Taxes, Patna South Circle, Patna, which was in Form GST ASMT-13 and GST DRC-07. The petitioner contended that the appellate order was bad in law due to a violation of the principles of natural justice, specifically alleging that insufficient time was provided for them to present their case. Additionally, the petitioner argued that the appellate order lacked sufficient reasoning to determine the amount due and payable by the assessee. The Revenue stated it had no objection to the matter being remanded for fresh decision on merits, with no coercive steps taken against the petitioner during the pendency.

Held

The Court held that the impugned order dated May 14, 2022, passed by the Additional Commissioner of State Taxes (Appeal) was bad in law on two grounds: (a) violation of the principles of natural justice, as the petitioner was not afforded sufficient time to present their case, and (b) the order lacked sufficient reasoning for determining the amount due and payable by the assessee. The Court found that an order passed in violation of natural justice entails civil consequences. Consequently, the Court quashed and set aside the impugned appellate order dated May 14, 2022, and the original order dated September 26, 2020. The Court directed the Assessing Authority to decide the case afresh on merits after complying with the principles of natural justice, affording adequate opportunity to all parties, and passing a speaking order with reasons. The Court also directed the de-freezing of the petitioner's bank accounts and stipulated that no coercive steps would be taken against the petitioner during the pendency of the proceedings. 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 order passed by the Additional Commissioner of State Taxes (Appeal) dated May 14, 2022, is bad in law for violating the principles of natural justice, specifically the right to a fair opportunity of hearing, as argued by the petitioner? The petitioner contended that they were not afforded sufficient time to represent their case. The Revenue did not contest this point directly but agreed to a remand. 2. Whether the order passed by the Additional Commissioner of State Taxes (Appeal) dated May 14, 2022, is bad in law for failing to assign sufficient reasons for determining the amount due and payable by the assessee, as argued by the petitioner? The petitioner argued that the order did not provide decipherable reasoning. The Revenue did not contest this point directly but agreed to a remand. 3. Whether the matter should be remanded to the Assessing Authority for a fresh decision on merits, considering the Revenue's submission that they have no objection to such a course of action and the petitioner's grievance regarding procedural irregularities?