Mukesh Kumar Jha vs. The State Of Bihar

Facts

The petitioner, Mukesh Kumar Jha, filed a writ petition challenging an order dated 05.07.2021 passed by the Additional Commissioner (Appeal), State Tax, Purnea, which rejected his appeal. The appeal was against an ex parte order dated 18.02.2020 passed by the Assistant Commissioner of State Tax, Saharsa, in Form GST DRC-07. Both the original order and the appellate order were ex parte. The petitioner contended that he was not afforded a fair opportunity of hearing and that the ex parte orders lacked sufficient reasoning for determining the tax due. The Revenue stated it had no objection to the matter being remanded for fresh decision on merits, with no coercive steps taken against the petitioner during pendency.

Held

The Court held that the ex parte orders passed by the authorities were bad in law due to the violation of the principles of natural justice, specifically the lack of a fair opportunity of hearing for the petitioner. The Court also noted that the ex parte orders did not provide sufficient reasoning for determining the amount due. On these grounds, the Court quashed and set aside the impugned order dated 05.07.2021 passed by the Additional Commissioner (Appeal), the order dated 18.02.2020 passed by the Assistant Commissioner of State Tax, and the related notices. The Court directed the petitioner to deposit an additional ten percent of the demand within four weeks, without prejudice to his rights. 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 opportunity to all parties, and passing a speaking order within two months. 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 the merits of the case.

Key Issues

1. Whether the ex parte orders passed by the Assistant Commissioner of State Tax and the Additional Commissioner (Appeal) violated the principles of natural justice, specifically the right to a fair opportunity of hearing, under Article 226 of the Constitution of India? 2. Whether the ex parte orders, lacking sufficient reasoning for determining the tax due, are bad in law and warrant interference by the High Court despite the availability of statutory remedies? Petitioner's Arguments: The petitioner argued that the orders were passed ex parte without providing sufficient time for him to present his case, thus violating the principles of natural justice. He also contended that the orders did not provide adequate reasons for determining the tax liability. Revenue's Arguments: The Revenue did not contest the petitioner's claims and agreed to a remand of the matter to the Assessing Authority for a fresh decision on merits. They also agreed that no coercive steps should be taken against the petitioner during the pendency of the case.