Priya Devi vs. The State Of Bihar

Facts

The petitioner, Priya Devi, filed a writ petition before the Patna High Court challenging two ex parte orders passed by the Joint Commissioner of State Tax and the Assistant Commissioner of State Tax, Motihari Circle, Motihari, dated 05.03.2020 and 09.01.2021 respectively. These orders, along with their summaries in Form GST DRC-07, were challenged on the grounds of violation of principles of natural justice and lack of sufficient 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. The petitioner stated that over 75% of the demanded amount had been deposited.

Held

The Court held that the impugned orders dated 05.03.2020 and 09.01.2021, passed by the Joint Commissioner and Assistant Commissioner of State Tax respectively, were liable to be quashed and set aside. The primary reasoning was the 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 orders which did not provide sufficient reasons for determining the tax due. 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 the impugned orders. The Court also noted the petitioner's statement regarding the deposit of over 75% of the demanded amount, which was to be without prejudice to the parties' rights 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 afresh 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 opinion was expressed on the merits of the case.

Key Issues

1. Whether the ex parte orders passed by the Joint Commissioner and Assistant Commissioner of State Tax, violating the principles of natural justice by not affording a fair opportunity of hearing and lacking sufficient reasoning, are liable to be quashed? Petitioner's contention: The petitioner argued that the impugned orders were bad in law as they were passed ex parte without providing adequate time for representation and lacked discernible reasons for determining the tax liability. This violation of natural justice principles, leading to civil consequences, warranted interference by the High Court despite the availability of statutory remedies. Revenue's contention: The learned counsel for the Revenue stated that they had no objection if the matter was remanded to the Assessing Authority for deciding the case afresh on merits. They also agreed that no coercive steps would be taken against the petitioner during the pendency of the case.