Umakant Singh vs. The State Of Bihar

Facts

The petitioner, Umakant Singh, through his power of attorney holder, challenged orders dated 04.02.2021 passed by the Assistant Commissioner of State Taxes, Katihar Circle. These orders, along with a Summary of Order in Form GST DRC-07, were ex parte. The petitioner contended that the orders were passed in violation of principles of natural justice, as he was not afforded a fair opportunity of hearing and sufficient time to present his case. The Revenue, represented by the State of Bihar, 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 the pendency of the case. The Court considered the record and the arguments presented.

Held

The Court held that the impugned orders were bad in law for two primary reasons: (a) violation of the principles of natural justice, specifically the lack of a fair opportunity of hearing and insufficient time afforded to the petitioner to present his case, and (b) the orders being ex parte and lacking sufficient reasoning to decipher how the tax amount was determined. The Court found that the authorities had not adjudicated the matter on the attending facts and circumstances, and all issues of fact and law ought to have been dealt with. Consequently, the Court quashed and set aside the impugned orders. The Court also directed the petitioner to deposit twenty percent of the demanded amount within four weeks, without prejudice to the parties' rights. The bank accounts of the petitioner were to be de-frozen immediately. The petitioner was directed to appear before the Assessing Authority on 16th May 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 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 impugned orders dated 04.02.2021, passed by the Assistant Commissioner of State Taxes, Katihar Circle, and the Summary of Order in Form GST DRC-07, are bad in law due to violation of the principles of natural justice, specifically the right to a fair opportunity of hearing? (Question of law) 2. Whether the ex parte orders, which allegedly do not sufficiently assign reasons for determining the amount due, are legally sustainable? (Question of law) Petitioner's Arguments: The petitioner argued that the orders were passed ex parte without providing sufficient time for hearing, thus violating the principles of natural justice. He also contended that the orders lacked sufficient reasoning to justify the determined tax liability. 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, subject to certain conditions, including that no coercive steps would be taken against the petitioner.