Ratneshwari Prasad Thakur vs. State Of Bihar

Facts

The petitioner, Ratneshwari Prasad Thakur, filed a writ petition challenging three orders dated January 12, 2021, passed by the Assistant Commissioner of State Taxes, East Circle, Muzaffarpur, Bihar. These orders pertained to GSTN 10ACAPT7136Q2ZA, Reference No. ZA1003200020204, and a summary of the order in Form GST DRC-07. The petitioner sought to quash these orders. The Revenue, through its counsel, 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 the pendency of the case. The Court accepted this statement.

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 represent his case; and (b) the ex parte nature of the orders, which did not assign sufficient reasons for determining the amount due and payable by the assessee. The Court found that such orders, entailing civil consequences, were unsustainable on these grounds alone. Consequently, the Court quashed and set aside the impugned orders. The Court directed the petitioner to deposit twenty percent of the demand within four weeks, without prejudice to the rights of the parties. It also ordered the de-freezing of the petitioner's bank accounts and directed the Assessing Authority to decide the case on merits after complying with the principles of natural justice, affording parties an opportunity to present documents, and passing a speaking order within two months of the petitioner's appearance. No opinion was expressed on the merits of the case, and all issues were left open.

Key Issues

1. Whether the impugned orders passed by the Assistant Commissioner of State Taxes are bad in law due to 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 his case? 2. Whether the ex parte orders, which do not assign sufficient reasons for determining the amount due and payable by the assessee, are legally sustainable? Petitioner's Contentions: The petitioner argued that the orders were passed in violation of the principles of natural justice, as he was not afforded a fair opportunity of hearing and was not given sufficient time to present his case. He also contended that the ex parte orders lacked sufficient reasoning to justify the demand raised against him. Revenue's Contentions: The Revenue stated it had no objection to the matter being remanded to the Assessing Authority for a fresh decision on merits. It also agreed that no coercive steps should be taken against the petitioner during the pendency of the case.