M/S Pravin Kumar Singh vs. The State Of Bihar

Facts

The petitioner, M/s Pravin Kumar Singh, filed a writ petition before the Patna High Court challenging an order in Form GST DRC-13 dated 25.02.2022 and a summary of order in Form GST DRC-07 dated 04.03.2020, both issued by the Assistant Commissioner of State Tax, Muzaffarpur East Circle. The petitioner contended that the order was ex parte and passed in violation of principles of natural justice, as insufficient time was provided for representation and the order lacked sufficient reasoning. 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 order in Form GST DRC-13 dated 25.02.2022 and the summary of order in Form GST DRC-07 dated 04.03.2020 were bad in law. The Court found a violation of the principles of natural justice, specifically the lack of a fair opportunity of hearing and insufficient time afforded to the petitioner. Furthermore, the ex parte nature of the order and the absence of decipherable reasoning for determining the amount due were noted. The Court reasoned that orders entailing civil consequences must adhere to natural justice principles and adjudicate on facts and law. Consequently, the Court quashed and set aside the impugned orders. The petitioner was directed to deposit ten percent of the demand within four weeks, without prejudice to their rights. Bank accounts were to be de-frozen immediately. The petitioner was to appear before the Assessing Authority on 6th June 2022, and the Assessing Authority was directed to decide the case on merits after complying with 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 during this period. The Court explicitly stated it had not expressed any opinion on merits.

Key Issues

1. Whether the order in Form GST DRC-13 dated 25.02.2022 and the summary of order in Form GST DRC-07 dated 04.03.2020 are liable to be quashed on the grounds of violation of principles of natural justice and being passed ex parte without sufficient reasoning? The petitioner argued that the orders were bad in law due to a lack of fair opportunity of hearing and insufficient reasoning to determine the amount due. The Revenue did not contest this point and agreed to a remand.