Jay Kishor Mandal vs. The State Of Bihar

Facts

The petitioner, Jay Kishor Mandal, sought to quash an ex parte order dated March 3, 2020, passed by the Assistant Commissioner of State Taxes, Munger Circle, 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 insufficient time was provided for him to present his case, and the order lacked sufficient reasoning for the determined tax liability. The revenue, through the learned counsel for the State, had no objection to the matter being remanded for a fresh decision on merits, with no coercive steps to be taken against the petitioner during the pendency of the case. The High Court, while acknowledging the statutory remedy, found grounds to interfere due to the ex parte nature of the order and the violation of natural justice principles.

Held

The High Court held that the impugned order dated 03.03.2020 and the summary of the order in Form GST DRC-07 were bad in law due to a violation of the principles of natural justice, specifically the lack of a fair opportunity of hearing afforded to the petitioner and the ex parte nature of the order. The Court found that insufficient time was given to the petitioner to represent his case, and the order did not provide sufficient reasoning for the determined tax liability. The Court also noted that the authorities had not adjudicated the matter on the attending facts and circumstances. 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 account(s) 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 concerned, and passing a speaking order within two months from 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 impugned order dated 03.03.2020 and the summary of the order in Form GST DRC-07, passed by the Assistant Commissioner of State Taxes, Munger Circle, are liable to be quashed on the ground of violation of the principles of natural justice, specifically the lack of a fair opportunity of hearing afforded to the petitioner? 2. Whether the ex parte order, which allegedly lacks sufficient reasoning for determining the tax liability, is bad in law and warrants interference by the High Court despite the availability of statutory remedies? Petitioner's contentions: The order was passed ex parte without affording sufficient time for representation, violating the principles of natural justice. The order lacks adequate reasoning to decipher how the tax liability was determined. The authorities failed to adjudicate the matter on the attending facts and circumstances. Revenue's contentions: The learned counsel for the Revenue stated no objection to the matter being 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.