Rakesh Roshan vs. State Of Bihar

Facts

The petitioner, Rakesh Roshan, a proprietary concern, challenged several orders and notices issued by the Assistant Commissioner of State Tax and the Additional Commissioner of State Tax (Appeal). These included a notice dated February 19, 2020, orders dated March 21, 2020, March 26, 2022, March 28, 2022, and March 29-30, 2022. The petitioner contended that the principles of natural justice were violated as they were not afforded sufficient time to present their case, and the orders were passed ex parte without adequate reasoning. The Revenue, through its counsel, agreed to a remand of the matter 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 quashed and set aside all the impugned notices and orders, including the notice dated February 19, 2020, orders dated March 21, 2020, March 26, 2022, March 28, 2022, and March 29-30, 2022. The Court found that the orders were bad in law due to a violation of the principles of natural justice, specifically the lack of a fair opportunity of hearing and the passing of ex parte orders that did not assign sufficient reasons for determining the amount due. The Court accepted the petitioner's statement that ten percent of the total amount required for appeal hearing had been deposited and directed that if not deposited, it should be done before the next date. The petitioner was also directed to deposit an additional ten percent of the demand raised within four weeks, without prejudice to the rights of the parties and subject to the final order. The Court directed the de-freezing of the petitioner's bank accounts and ordered the Assessing Authority 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 the merits of the case, leaving all issues open.

Key Issues

1. Whether the impugned orders and notices are liable to be quashed on the grounds of violation of the principles of natural justice, specifically the lack of a fair opportunity of hearing and the passing of ex parte orders without sufficient reasoning, thereby contravening principles of natural justice and potentially Section 73 or similar provisions related to demand and recovery under the GST Act? Petitioner's Arguments: The petitioner argued that the authorities failed to provide adequate time for them to represent their case, leading to ex parte orders. They contended that these orders lacked sufficient reasoning to justify the determined tax liability and were passed without adjudicating on the attending facts and circumstances, thus violating fundamental principles of natural justice. The petitioner sought to quash all impugned orders and notices. Revenue's Arguments: The Revenue did not contest the petitioner's plea for a remand. Their counsel stated they had no objection if the matter was remanded to the Assessing Authority for a fresh decision on merits. They also agreed that no coercive steps would be taken against the petitioner during the pendency of the case.