Aadhar Stumbh Township Private Limited vs. The State Of Bihar

Facts

The petitioner, Aadhar Stumbh Township Private Limited, challenged a non-speaking order dated March 1, 2021, passed by the Additional Commissioner of State Tax (Appeal), Patna West Division. This order rejected the petitioner's appeal against an order dated March 4, 2020, and a communication dated March 5, 2020, issued by the Deputy Commissioner of State Tax, Patna South, under Section 74 of the Bihar Goods and Service Tax Act, 2017. The original orders pertained to the tax period of December 2018. The petitioner sought quashing of the appellate order, a direction for an opportunity to be heard, and a stay on coercive actions, including the attachment of its bank account by Kotak Mahindra Bank Ltd. and remittance of funds to the tax department.

Held

The Court held that the impugned order dated March 1, 2021, passed by the Additional Commissioner of State Tax (Appeal) was bad in law due to a violation of the principles of natural justice, specifically the lack of a fair opportunity of hearing and the non-speaking nature of the order. The Court found that the order did not provide sufficient reasons for determining the amount due. Consequently, the Court quashed and set aside the impugned order of the Appellate Authority dated March 1, 2021, and the original orders dated March 4, 2020, and March 5, 2020, passed by the Deputy Commissioner of State Tax. The Court accepted the petitioner's statement that ten percent of the total amount had been deposited and directed that the appeal be decided on merits. If the amount was not deposited, it was to be done before the next date. The Court also directed the de-freezing/de-attaching of the petitioner's bank account(s). The Appellate Authority was directed to condone the delay, decide the appeal on merits after complying with principles of natural justice, afford adequate opportunity to all parties, and refrain from taking coercive steps during the pendency of the appeal. The Appellate Authority was to decide the appeal expeditiously, preferably within two months. The Court explicitly stated that it had not expressed any opinion on the merits of the case and all issues were left open.

Key Issues

1. Whether the appellate authority's order dated March 1, 2021, rejecting the petitioner's appeal, is liable to be quashed for being non-speaking and violating principles of natural justice, specifically the right to a fair hearing, under the Bihar Goods and Service Tax Act, 2017? 2. Whether the petitioner is entitled to an opportunity of being heard before the Appellate Authority without re-submitting the pre-deposit amount, given that it was deposited in a previous appeal that has not been returned? 3. Whether the petitioner is entitled to a stay on coercive actions, including the attachment and remittance of funds from its bank account, pending the decision on its appeal? Petitioner's arguments: The petitioner contended that the appellate order was non-speaking and passed without affording a sufficient opportunity of hearing, thus violating principles of natural justice. They also argued that the pre-deposit amount for the previous appeal had not been returned, and therefore, they should not be required to deposit it again. They sought to restrain coercive recovery actions. Revenue's arguments: The learned counsel for the Revenue stated they had no objection if the matter was remanded to the Appellate Authority for a fresh decision, with the condition that the ground of delay would not be taken into account and the appeal would be decided on merits. They also agreed that no coercive steps would be taken against the petitioner during the pendency of the appeal.