Facts of the Case

The petitioner, M/S Sonal Agencies, through its proprietor Sanjay Kumar, was assessed by an order dated 12.03.2020 passed by the Assistant Commissioner of State Tax, Samastipur Circle, Samastipur, along with a summary of order dated 15.03.2020 in Form GST DRC-07 (Reference No. ZA100320018111T). The petitioner's appeal against this assessment (Appeal Case No. AD1004210023229) was rejected by the Additional Commissioner of State Tax (Appeal), Darbhanga Division, by order dated 28.07.2021, but merely on the ground of non-filing of a certified copy, without going into the merits. The petitioner contended that the underlying order of assessment itself had been passed in violation of the principles of natural justice, and approached the Patna High Court challenging both the appellate rejection and the original assessment.

Issues Involved

  1. Whether an appeal can be rejected solely on the technical ground of non-filing of a certified copy, without adjudicating the merits.
  2. Whether the underlying assessment order, passed ex parte, violated the principles of natural justice.
  3. Whether the writ court could interfere despite the availability of a statutory remedy where the order is ex facie bad in law.

Petitioner's Arguments

  • The appellate order dated 28.07.2021 rejected the appeal merely on the technical ground of non-filing of a certified copy, without considering the substance of the challenge.
  • The order of assessment dated 12.03.2020 and the summary in Form GST DRC-07 had been passed in violation of the principles of natural justice, without sufficient opportunity of hearing.

Respondent's Arguments

  • Learned counsel for the Revenue stated he had no objection to the matter being remanded to the Assessing Authority for a fresh decision on merits.
  • Undertook that no coercive steps would be taken against the petitioner during pendency of the remanded proceedings.

Court Order/Findings

  • Held that, notwithstanding the statutory remedy, the Court is not precluded from interfering where an order is ex facie bad in law.
  • Found the assessment order was passed in violation of principles of natural justice, as no sufficient time was afforded to the petitioner, and the order did not assign reasons decipherable from the record for the amount determined.
  • Held that the authorities had not adjudicated the matter on the attending facts and circumstances, and all issues of fact and law ought to have been dealt with even in ex parte proceedings.
  • Quashed the appellate order dated 28.07.2021, the assessment order dated 12.03.2020, and the summary of order dated 15.03.2020 in Form GST DRC-07.
  • Remanded the matter for fresh, reasoned decision after affording opportunity of hearing, subject to the petitioner depositing an additional 10% of the demand within four weeks (10% already stood deposited as appeal pre-deposit), with bank accounts to be de-frozen immediately and no coercive steps taken meanwhile.

Important Clarification

  • An appeal cannot be disposed of purely on a technical ground such as non-filing of a certified copy where the underlying order is itself under challenge for violation of natural justice; both the appellate and original orders can be set aside on that short ground.
  • Such a remand does not amount to a finding on the merits of the tax demand; all contentions of the parties are expressly left open for the Assessing Authority to decide afresh.

Sections Involved

  • Bihar Goods and Services Tax Act, 2017 — governs assessment and appellate proceedings referred to in the impugned orders.
  • Form GST DRC-07 — summary of the demand order issued under the Bihar GST Act, 2017 and the corresponding CGST Rules, 2017.

Decision – In Favour of

Disposed of with directions, in favour of the Assessee. The impugned appellate and assessment orders were quashed on the short ground of violation of natural justice, and the matter was remanded for fresh adjudication on merits, subject to an additional pre-deposit condition. The Court expressly clarified it has not expressed any opinion on merits and all issues are left open.

Related Case Laws

No related case laws are available on this site at present.

Case Details

  • Court: High Court of Judicature at Patna
  • Case No.: Civil Writ Jurisdiction Case No. 5403 of 2022
  • Coram: Hon'ble the Chief Justice (Sanjay Karol, CJ) and Hon'ble Mr. Justice S. Kumar
  • Date: 18.04.2022

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