Facts of the Case

The Petitioner, Sai Enterprises, a proprietorship of Bijay Kumar Chourasia registered under GSTIN 10AFHPC6919C1Z3, challenged an appellate order dated 09.09.2021 passed by the Additional Commissioner, State Tax (Appeal), Bhagalpur Division, rejecting its appeal against an assessment order dated 25.02.2020 passed by the Assistant Commissioner of State Tax, Bhagalpur Circle, along with the consequential summary of order in Form GST DRC-07 dated 26.02.2020. The Petitioner contended that both the original and appellate orders were passed ex parte, and that its submission on the applicability of the amendment brought about by Section 50 had not been considered.

Issues Involved

  1. Whether writ jurisdiction could be invoked despite an available statutory remedy, where the impugned order is ex facie bad in law.
  2. Whether the ex parte assessment and appellate orders, passed without adequate opportunity of hearing and without reasons, could be sustained.

Petitioner's Arguments

  • Both the assessment order and the appellate order were passed ex parte, without affording the Petitioner sufficient time to represent its case.
  • The appellate authority failed to consider the Petitioner's contention regarding the applicability of the amendment brought in by virtue of Section 50.
  • Sought quashing of the assessment order, the appellate order, and the DRC-07 summary, along with de-attachment of the bank account.

Respondent's Arguments

  • Counsel for the Revenue stated there was no objection to the matter being remanded to the Assessing Authority for a fresh decision on merits.
  • Agreed that no coercive steps would be taken against the Petitioner during pendency of the case.

Court Order / Findings

  • The Court held that writ jurisdiction is not precluded by an available statutory remedy where the order is ex facie bad in law, for two reasons: violation of natural justice through insufficient opportunity of hearing, and an ex parte order that assigned no discernible reasons for the amount determined.
  • Quashed and set aside the appellate order dated 09.09.2021, the assessment order dated 25.02.2020, and the DRC-07 summary dated 26.02.2020.
  • Directed immediate de-freezing/de-attachment of the Petitioner's bank account(s) attached in connection with the proceedings.
  • Remanded the matter to the Assessing Authority to decide afresh on merits, subject to deposit of 10% of the demand already made plus an additional 10% within four weeks, without prejudice to the parties' rights, refundable if found excess.
  • Directed a fresh speaking order within two months of the Petitioner's appearance, after affording adequate opportunity of hearing; expressed no opinion on merits and left all issues open.

Important Clarification

  • An ex parte GST assessment or appellate order that assigns no discernible reasons for the tax determined can be quashed in writ jurisdiction even where a statutory appellate remedy exists, if the order is ex facie bad in law.
  • Bank account attachment consequent upon such a flawed order can be directed to be de-frozen immediately alongside the quashing of the underlying order.
  • Remand with deposit conditions is a common middle path — it protects revenue interests while ensuring the assessee gets a fresh, reasoned hearing.

Sections Involved

  • Section 50, Central Goods and Services Tax Act, 2017 — deals with interest on delayed payment of tax; its amendment was a contention the appellate authority failed to consider.
  • Section 107, Bihar Goods and Services Tax Act, 2017 — governs appeals against orders of the proper officer, under which the rejected appeal had been filed.
  • Form GST DRC-07 — the summary of the order specifying the amount payable, quashed along with the underlying assessment.

Decision – In Favour of

Disposed of with directions, in favour of the Assessee — the ex parte assessment and appellate orders were quashed for violation of natural justice, the bank account was ordered to be de-frozen immediately, and the matter was remanded for a fresh, reasoned decision, with no opinion expressed on merits.

Case Details

  • Court: High Court of Judicature at Patna
  • Case No.: Civil Writ Jurisdiction Case No.2516 of 2022
  • Coram: Chief Justice Sanjay Karol and Justice S. Kumar
  • Date of Order: 21.02.2022
  • Parties: Sai Enterprises (Proprietorship), through Bijay Kumar Chourasia, vs Union of India & Ors.

Link to Download the Order

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