Jay Kishor Mandal vs. The State Of Bihar

Facts

The petitioner, Jay Kishor Mandal, challenged an ex parte order dated March 3, 2020, passed by the Assistant Commissioner of State Taxes, Munger Circle, Munger, along with 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, through learned counsel, stated they had no objection if the matter was remanded to the Assessing Authority for a fresh decision on merits, with no coercive steps to be taken against the petitioner during the pendency of the case.

Held

The Court held that the impugned order dated March 3, 2020, and the summary of the order in Form GST DRC-07 were bad in law for 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, and (b) the ex parte nature of the order, which did not provide decipherable reasons for determining the amount due. The Court found that all issues of fact and law ought to have been dealt with, even in ex parte proceedings. 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 adequate opportunity to all parties, and passing a speaking order within two months. No opinion was expressed on the merits of the case.

Key Issues

1. Whether the impugned order dated 03.03.2020 and the summary of the order in Form GST DRC-07 are bad in law due to violation of the principles of natural justice, specifically the right to a fair opportunity of hearing? 2. Whether the ex parte order, which allegedly lacks sufficient reasoning for determining the amount due, is liable to be quashed? Petitioner's Arguments: The petitioner argued that the order was passed ex parte without providing adequate time for representation and that the order itself lacked sufficient reasoning. The violation of natural justice principles, specifically the right to a fair hearing, was a primary contention. Revenue's Arguments: The Revenue stated they had no objection to the matter being remanded to the Assessing Authority for a fresh decision on merits. They also agreed that no coercive steps should be taken against the petitioner during the pendency of the case.