Shri Sai Chandra Infrawell PVT. LTD. vs. The State Of Bihar

Facts

The petitioner, Shri Sai Chandra Infrawell Pvt. Ltd., filed a writ petition challenging an order dated 10.08.2021 passed by the Additional Commissioner of State Taxes (Appeals), Patna, which rejected its appeal. This appeal was against an order dated 05.03.2020 passed by the Joint Commissioner of State Taxes, Patna, and a Summary of Order in Form GST DRC-07 dated 05.03.2020. Both the original order and the summary order were ex parte. The petitioner contended that it was not afforded a fair opportunity of hearing and that the orders were passed without sufficient reasoning. The Revenue 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 pendency.

Held

The Court held that the impugned orders were bad in law on two grounds: (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 its case, and (b) the ex parte nature of the orders, which lacked sufficient reasoning to determine the amount due and payable. The Court found that the authorities had not adjudicated the matter on the attending facts and circumstances, failing to deal with all issues of fact and law. Consequently, the Court quashed and set aside the impugned order dated 10.08.2021 (Additional Commissioner of State Taxes (Appeals)), the order dated 05.03.2020 (Joint Commissioner of State Taxes), the Summary of Order in Form GST DRC-07 dated 05.03.2020, and the summary of demand in Form GST APL-04 dated 12.08.2021. The Court directed the Assessing Authority 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. The Court also directed the de-freezing of the petitioner's bank accounts and stipulated that no coercive steps would be taken during the pendency of the case. The Court explicitly stated that it had not expressed any opinion on the merits of the case, leaving all issues open.

Key Issues

1. Whether the impugned orders passed by the respondents are bad in law due to violation of the principles of natural justice, specifically the right to a fair opportunity of hearing, as argued by the petitioner? The petitioner contended that insufficient time was provided to represent its case, leading to ex parte orders that lacked sufficient reasoning for determining the amount due. The Revenue did not contest this point, agreeing to a remand. 2. Whether the ex parte orders, which entail civil consequences, are liable to be quashed for failing to adjudicate on the attending facts and circumstances and for not dealing with all issues of fact and law, as argued by the petitioner? The petitioner argued that even ex parte proceedings require proper adjudication. The Revenue did not present arguments against this.