Soma Indus Varanasi Aurangabad Tollway Private Limited vs. The State Of Bihar

Facts

The petitioner, Soma Indus Varanasi Aurangabad Tollway Private Limited, challenged orders dated 04.03.2020 and 05.03.2020, issued by the Joint Commissioner of State Tax, Aurangabad (Respondent No. 2) under Section 74 of the BGST Act, for tax periods April-September 2019 and October 2018-March 2019. These orders were affirmed by the Additional Commissioner of State Tax (Appeals), Magadh Division, Gaya (Respondent No. 3) through appellate orders dated 23.03.2020. The petitioner also sought quashing of a debit of Rs. 13,53,638/- from its Electronic Credit and Cash Ledger by Respondent No. 2 and refund of the said amount. The petitioner contended that the orders were passed in violation of principles of natural justice, as insufficient time was provided for representation and the orders were ex parte and lacked sufficient reasoning.

Held

The Court quashed and set aside the impugned orders dated 23.03.2020 passed by Respondent No. 3 (Additional Commissioner of State Tax Appeals) and the orders dated 04.03.2020 and 05.03.2020 passed by Respondent No. 2 (Joint Commissioner of State Tax). The Court found that the orders were passed in violation of the principles of natural justice, specifically the right to a fair opportunity of hearing, as the petitioner was not afforded sufficient time to present its case. The Court also noted that the orders were ex parte and lacked sufficient reasoning. The Court accepted the petitioner's statement that the entire demanded amount, including tax and penalty, had been recovered or paid, and that ten percent of the total amount, a prerequisite for appeal hearing, had been deposited. The Court directed the de-freezing of the petitioner's bank accounts and ordered the Assessing Authority to decide the case afresh on merits after complying with the principles of natural justice, affording adequate opportunity to all parties, and passing a speaking order within two months. No opinion was expressed on the merits of the case, leaving all issues open.

Key Issues

1. Whether the impugned orders dated 04.03.2020 and 05.03.2020, passed by Respondent No. 2 under Section 74 of the BGST Act, and the appellate orders dated 23.03.2020, passed by Respondent No. 3, are liable to be quashed on the grounds of violation of principles of natural justice, specifically the lack of sufficient opportunity of hearing and ex parte nature of the orders? Petitioner's Contention: The petitioner argued that the orders were passed in violation of the principles of natural justice. They contended that they were not afforded sufficient time to represent their case, leading to ex parte orders that lacked adequate reasoning for determining the amount due. The petitioner sought to quash these orders and direct the refund of the debited amount. Revenue's Contention: The learned counsel for the Revenue stated that they had no objection if the matter was remanded to the Assessing Authority for deciding the case afresh on merits. They also agreed that no coercive steps would be taken against the petitioner during the pendency of the case.