Jay Kishor Mandal vs. The State Of Bihar

Facts

The petitioner, Jay Kishor Mandal, sought to quash an ex parte order dated January 11, 2021, passed by the Assistant Commissioner of State Taxes, Munger Circle, Munger, and the summary of the order in Form GST DRC-07. The petitioner contended that the order was passed in violation of the principles of natural justice, as he was not afforded a fair opportunity of hearing and sufficient time to represent his case. The order was also criticized for lacking sufficient reasoning to determine the amount due. The Revenue stated it had no objection if the matter was remanded for fresh decision on merits, with no coercive steps taken against the petitioner during pendency.

Held

The Court held that the impugned order dated January 11, 2021, and the summary of the order in Form GST DRC-07 were 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 order lacked sufficient reasoning to determine the amount due. The Court noted that even in ex parte proceedings, all issues of fact and law ought to have been adjudicated. Consequently, the Court quashed and set aside the impugned order and the summary of the order. The Court directed the petitioner to deposit twenty percent of the demand within four weeks, without prejudice to the parties' rights. The bank accounts of the petitioner were to be de-frozen immediately. The petitioner was directed to appear before the Assessing Authority on June 6, 2022, and the Assessing Authority was directed to decide the case on merits after complying with the principles of natural justice, affording opportunity for submission of documents, 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 it had not expressed any opinion on merits, leaving all issues open.

Key Issues

1. Whether the impugned order dated January 11, 2021, passed by the Assistant Commissioner of State Taxes, Munger Circle, Munger, and the summary of the order in Form GST DRC-07 are bad in law due to violation of principles of natural justice, specifically the right to a fair opportunity of hearing and insufficient time afforded to the petitioner? 2. Whether the ex parte order, which allegedly lacks decipherable reasoning for determining the amount due, is liable to be quashed? Petitioner's Contentions: The petitioner argued that the order was ex parte and passed in violation of principles of natural justice, as insufficient time was given to present his case. He also contended that the order lacked sufficient reasoning to justify the demand. Revenue's Contentions: The Revenue stated it had no objection to the matter being remanded to the Assessing Authority for a fresh decision on merits, and that no coercive steps would be taken against the petitioner during the pendency of the case.