M/S Vikramshila Trading Company vs. The State Of Bihar

Facts

The petitioner, M/s Vikramshila Trading Company, filed a writ petition challenging an order dated 09.03.2022 passed by the Additional Commissioner of State Taxes (Appeals), Bhagalpur Division. This appellate order had rejected the petitioner's appeal against an order dated 18.03.2020 passed by the Assistant Commissioner of State Taxes, Bhagalpur, and a summary of order dated 21.03.2020 in Form GST DRC-07. The original orders pertained to the financial year 2018-2019. The petitioner contended that the appellate order was cryptic, misconceived, and non-speaking, and that they were not afforded a fair opportunity of hearing. The Revenue stated it had no objection if the matter was remanded to the Assessing Authority for a fresh decision on merits, with no coercive steps taken against the petitioner during pendency.

Held

The Court held that the impugned order dated 09.03.2022 passed by the Additional Commissioner of State Taxes (Appeals) was bad in law for two primary reasons. Firstly, there was a violation of the principles of natural justice, as the petitioner was not afforded a fair opportunity of hearing and sufficient time to represent their case. Secondly, the order was passed ex parte without assigning sufficient reasons to justify the determination of the amount due. The Court also found that the authorities had not adjudicated the matter on the attending facts and circumstances, failing to deal with all issues of fact and law. Consequently, the Court quashed and set aside the impugned appellate order, the order dated 18.03.2020, and the summary of order dated 21.03.2020. The Court directed the petitioner to deposit an additional ten percent of the demand raised before the Assessing Officer within four weeks, without prejudice to the rights of the parties. The bank accounts of the petitioner were ordered to be de-frozen. 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 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 merits and all issues were left open.

Key Issues

1. Whether the order 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 the ex parte nature of the order without sufficient reasoning? 2. Whether the authorities failed to adjudicate the matter on the attending facts and circumstances, neglecting to deal with all issues of fact and law? Petitioner's Arguments: The petitioner argued that the appellate order was cryptic, misconceived, and non-speaking. They contended that they were not given sufficient time to represent their case and that the order was passed ex parte without adequate reasons for determining the amount due. They also argued that the authorities did not adjudicate the matter on the facts and circumstances, failing to address all issues of fact and law. Revenue's Arguments: The Revenue stated it 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.