Mithilesh Kumar Gupta vs. The State Of Bihar

Facts

The petitioner, Mithilesh Kumar Gupta, proprietor of M/s. Mahabir Drugs, filed a writ petition challenging two orders: one dated 08.03.2020 passed by the Assistant Commissioner of State Taxes, Darbhanga, and another dated 08.01.2022 passed by the Additional Commissioner of State Taxes (Appeals), Darbhanga. Both orders were ex parte. The petitioner argued that he was not afforded a fair opportunity of hearing and that the orders lacked sufficient reasoning. The Revenue, through the learned Advocate General, agreed to a remand for fresh adjudication on merits, with no coercive steps to be taken against the petitioner during the pendency of the case.

Held

The Court held that the impugned orders were bad in law for two primary reasons: (a) violation of the principles of natural justice, as the petitioner was not afforded a fair opportunity of hearing and sufficient time to present his case, and (b) the ex parte orders lacked sufficient reasoning to decipher how the amount due 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 ten percent of the total amount if not already done, and an additional ten percent of the demand within four weeks, without prejudice to the rights of the parties. The bank accounts of the petitioner were ordered 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 explicitly stated that it had not expressed any opinion on merits and all issues were left open.

Key Issues

1. Whether the impugned orders, passed ex parte, violated the principles of natural justice by not affording a fair opportunity of hearing to the petitioner and by failing to provide sufficient reasoning for the determination of the amount due. Petitioner's arguments: The petitioner contended that the orders were bad in law due to a violation of the principles of natural justice, specifically the lack of sufficient time to represent his case and the ex parte nature of the proceedings. He argued that the orders did not sufficiently explain how the amount due was determined. Revenue's arguments: The learned counsel for the Revenue stated that he had no objection if the matter was remanded to the Assessing Authority for deciding the case afresh on merits. The Revenue also agreed that no coercive steps would be taken against the petitioner during the pendency of the case.