M/S Arihant Enterprises vs. The State Of Bihar

Facts

M/s Arihant Enterprises, a partnership firm, filed a writ petition before the Patna High Court challenging multiple orders passed by various State Tax authorities. These orders included those from the Assistant Commissioner, Deputy Commissioner, and Additional Commissioner (Appeals). The petitioner contended that these orders were ex parte and passed in violation of the principles of natural justice, specifically alleging insufficient opportunity to present their case. The financial year in dispute was 2019-2020. The revenue, through the Government Pleader, stated they had no objection if the matter was remanded to the Assessing Authority for a fresh decision on merits, and no coercive steps would be taken against the petitioner during the pendency of the case.

Held

The Court held that the writ petition could be interfered with, notwithstanding the statutory remedy, as the orders 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 nature of the orders, which did not provide sufficient reasoning for determining the amount due and payable. 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 addressed. Consequently, the Court quashed and set aside all the impugned orders. The Court also directed the petitioner to deposit ten percent of the total amount (if not already deposited) and an additional ten percent of the demand raised before the Assessing Officer within four weeks. Bank accounts were to be de-frozen. 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 of the petitioner's appearance. No coercive steps were to be taken against the petitioner during this period. The Court expressly stated that it had not expressed any opinion on merits and all issues were left open.

Key Issues

1. Whether the orders passed by the State Tax authorities, including the Additional Commissioner (Appeals), Deputy Commissioner, and Assistant Commissioner, were bad in law due to a violation of the principles of natural justice, specifically the right to a fair opportunity of hearing? 2. Whether the ex parte orders passed by the authorities lacked sufficient reasoning to determine the amount due and payable by the assessee? Petitioner's Arguments: The petitioner argued that the orders were ex parte and passed without affording them a sufficient opportunity to represent their case. They contended that the authorities failed to adjudicate the matter on the attending facts and circumstances and that all issues of fact and law ought to have been dealt with, even in ex parte proceedings. Revenue's Arguments: The Revenue stated that they had no objection to the matter being remanded to the Assessing Authority for a fresh decision on merits. They also agreed that no coercive steps would be taken against the petitioner during the pendency of the case.