M/S Sonal Agencies vs. The State Of Bihar

Facts

The petitioner, M/s Sonal Agencies, filed a writ petition challenging an order dated 28.07.2021 passed by the Additional Joint Commissioner of State Tax (Appeal). This appellate order rejected the petitioner's appeal against an order dated 12.03.2020 passed by the Assistant Commissioner of State Tax, Samastipur, and a summary of order in Form GST DRC-07 dated 15.03.2020. The appeal was rejected solely on the ground of non-filing of a certified copy. The petitioner contended that the assessment order was passed in violation of the principles of natural justice, as they were not afforded a fair opportunity of hearing and the order was passed ex parte without 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 the pendency.

Held

The Court held that it was not precluded from interfering with the matter despite the statutory remedy, as the order appeared ex facie bad in law. Two primary reasons were cited: (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 represent their case; and (b) the ex parte order lacked sufficient reasoning to justify the determined amount 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 should have been dealt with. Consequently, the Court quashed and set aside the impugned appellate order, the assessment order, and the summary of order. The Court directed the petitioner to deposit ten percent of the total demand amount within four weeks, without prejudice to their rights, and also directed the de-freezing of the petitioner's bank accounts. The Assessing Authority was directed 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. No opinion was expressed on the merits of the case.

Key Issues

1. Whether the appellate order rejecting the petitioner's appeal on the ground of non-filing of a certified copy, without adjudicating the merits of the case, is bad in law, particularly when the original assessment order was allegedly passed in violation of the principles of natural justice? Petitioner's contention: The petitioner argued that the appellate order was illegal as it failed to consider the merits of the case and was based on a procedural technicality (non-filing of certified copy) while the underlying assessment order itself was passed in violation of natural justice principles, lacking proper reasoning and opportunity for hearing. Revenue's contention: The Revenue did not contest the petitioner's plea for remand and agreed to the matter being decided afresh on merits by the Assessing Authority, without taking coercive steps against the petitioner.