Dhillon Freight Carriers PVT. LTD. vs. Commissioner Of State Tax

Facts

The petitioner, Dhillon Freight Carriers Pvt. Ltd., filed a writ petition challenging an ex-parte order dated March 24, 2021, passed by the Additional Commissioner of State Tax (Appeal), Patna, which dismissed their appeal in limine. This appeal was against an order dated July 16, 2019, passed by the Joint Commissioner of State Tax, Investigation Bureau, Patna, under Section 129(3) of the Bihar Goods and Services Tax Act, 2017, for the period 2019-20. The petitioner sought to quash these orders and stay the demand notice. The revenue's counsel agreed to a remand for fresh decision on merits, with no coercive steps during pendency. The Court noted violations of natural justice, including lack of sufficient hearing opportunity and insufficient reasoning in the ex-parte orders.

Held

The Court held that the impugned orders were bad in law due to violations of the principles of natural justice. Specifically, the Court found that the petitioner was not afforded a fair opportunity of hearing and that the ex-parte orders lacked sufficient reasoning to determine the amount due. The Court also noted that the authorities had not adjudicated the matter on the attending facts and circumstances. Consequently, the Court quashed and set aside both the appellate order dated March 24, 2021, and the original order dated July 16, 2019. The Court directed the petitioner to deposit ten percent of the demand amount within four weeks, in addition to any amount already deposited, without prejudice to their rights. The bank accounts of the petitioner were ordered to be de-frozen immediately. 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 opinion was expressed on the merits of the case, and all issues were left open.

Key Issues

1. Whether the ex-parte order dated March 24, 2021, passed by the Additional Commissioner of State Tax (Appeal) dismissing the petitioner's appeal in limine, without affording an adequate opportunity of being heard, is liable to be quashed? (Violation of principles of natural justice, specifically fair opportunity of hearing). 2. Whether the order dated July 16, 2019, passed by the Joint Commissioner of State Tax, Investigation Bureau, under Section 129(3) of the Bihar Goods and Services Tax Act, 2017, is liable to be quashed for being passed ex parte without sufficient reasoning and without adjudicating on the attending facts and circumstances? (Violation of principles of natural justice and insufficient reasoning). Petitioner's contentions: The petitioner argued that the appellate order was passed ex parte without proper service of notice and without granting an opportunity to be heard, violating the principles of natural justice. They also contended that the original order under Section 129(3) lacked sufficient reasoning and did not address the facts of the case. Revenue's contentions: The learned counsel for the Revenue stated they had no objection if the matter was remanded to the Assessing Authority for deciding the case afresh on merits, and that no coercive steps would be taken against the petitioner during the pendency of the case.