M/S Dhanvantari Medico vs. The State Of Bihar

Facts

The petitioner, M/s Dhanvantari Medico, a partnership firm, filed a writ petition challenging ex parte orders passed by the Assistant Commissioner of State Tax (Respondent No. 3) and the Additional Commissioner of State Tax (Appeals) (Respondent No. 2). The petitioner contended that these orders were passed in violation of the principles of natural justice, as they were not afforded a fair opportunity of hearing and sufficient time to present their case. The orders were also criticized for lacking sufficient reasoning to determine the amount due. The Revenue, through its counsel, agreed to a remand for fresh adjudication. The Court noted that the petitioner had deposited ten percent of the total demand, a prerequisite for appeal hearing.

Held

The Court held that the ex parte orders passed by the authorities were bad in law due to a clear violation of the principles of natural justice, specifically the lack of a fair opportunity of hearing and insufficient time afforded to the petitioner to represent their case. The Court also found that the orders lacked sufficient reasoning to decipher how the amounts due were determined. Consequently, the Court quashed and set aside the impugned orders. The Court accepted the petitioner's undertaking to deposit an additional ten percent of the demand raised by the Assessing Officer within four weeks, without prejudice to the rights of the parties. 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, providing adequate opportunity for hearing and submission of documents, and passing a speaking order within two months. No opinion was expressed on the merits of the case, and all issues were left open.

Key Issues

1. Whether the ex parte orders passed by the Assistant Commissioner of State Tax and the Additional Commissioner of State Tax (Appeals) are bad in law due to violation of the principles of natural justice, specifically the right to a fair opportunity of hearing and adequate time for representation, as contemplated under the relevant provisions of the GST Act and Rules? 2. Whether the ex parte orders are legally sustainable in the absence of sufficient reasoning to determine the amount due and payable by the assessee, thereby failing to adjudicate on the attending facts and circumstances? Petitioner's Arguments: The petitioner argued that the orders were ex parte and passed without providing adequate opportunity for hearing, thus violating principles of natural justice. They also contended that the orders lacked sufficient reasoning. Revenue's Arguments: The Revenue stated it had no objection if the matter was remanded to the Assessing Authority for deciding the case afresh on merits, and that no coercive steps would be taken against the petitioner during the pendency of the case.