Simplified Explanation of the Judgment
In a recent judgment dated 2nd December 2022, the Patna High Court set aside an assessment order passed under the GST regime due to a clear violation of natural justice principles. The case revolved around a petitioner who challenged the ex parte order passed by the Assistant Commissioner of State Tax (North Circle, Patna) on 09.01.2021, demanding tax under a reference number ZD1001210075277.
The petitioner argued that the order was passed without providing a fair chance to be heard and that no detailed reasoning was given to justify the demand raised. The order was not only ex parte (passed without the petitioner’s appearance) but also lacked any reference to facts or legal grounds explaining how the liability was computed.
Even the State’s counsel agreed during the hearing that the matter should be sent back to the tax authority for reconsideration on merits. Taking into account both parties’ agreement and the glaring procedural lapses, the Court decided to quash the impugned order and remand the case for fresh adjudication.
The Court noted two primary reasons for intervening despite the availability of a statutory remedy:
- The petitioner was not given a fair opportunity to present their case.
- The order lacked sufficient reasoning and failed to explain how the tax demand was calculated.
Accordingly, the High Court issued a series of directions to ensure a fair re-hearing:
- The earlier assessment order and the summary in GST Form DRC-07 were quashed.
- The petitioner was directed to deposit 20% of the demanded amount within four weeks as a condition for re-hearing. This deposit will be without prejudice to their rights and refundable if found excessive.
- Any attachment or freeze on the petitioner’s bank accounts was to be lifted immediately.
- The petitioner was asked to appear before the Assessing Officer on 2nd January 2023.
- The assessing authority was instructed to decide the case on its merits, after giving full opportunity of hearing and allowing all necessary documents to be filed.
- No coercive actions were to be taken against the petitioner while the matter is pending.
- The authority was directed to pass a fresh, well-reasoned speaking order within two months from the petitioner’s appearance.
- Both parties were given liberty to pursue further legal remedies depending on the outcome.
This judgment is another reminder that compliance with principles of natural justice—especially providing fair hearing and reasoned orders—is essential in all quasi-judicial proceedings under GST laws.
Significance or Implication of the Judgment
This ruling is significant for businesses and individuals facing adverse tax assessments under GST. It reiterates that tax authorities must follow due process and provide clear reasoning before raising demands. The decision also highlights the judiciary’s willingness to intervene where procedural fairness is compromised, even when alternative remedies exist.
For the government, the judgment serves as a call to ensure that tax officials conduct assessments transparently and judiciously. For taxpayers, it reaffirms that their right to be heard is protected and enforceable.
Legal Issue(s) Decided and the Court’s Decision
- Was the assessment order valid despite being ex parte?
- No, the order was quashed due to lack of fair hearing and inadequate reasoning.
- Can the High Court intervene when alternative statutory remedies exist?
- Yes, particularly when there’s a clear violation of natural justice.
- What remedy was provided?
- The case was remanded for fresh adjudication on merits with specific procedural safeguards.
Case Title
M/s Ghar Ghar Ki Awaz vs The State of Bihar & Ors.
Case Number
Civil Writ Jurisdiction Case No.16160 of 2022
Citation(s)- 2023 (1) PLJR 278
Coram and Names of Judges
Hon’ble the Chief Justice Sanjay Karol
Hon’ble Mr. Justice Partha Sarthy
Names of Advocates and Who They Appeared For
- Mr. Pawan Kumar Singh, Advocate (for the petitioner)
- Mr. Vikash Kumar, SC-11 (for the respondents)
Link to Judgment
MTUjMTYxNjAjMjAyMiMxI04=-XYRLbG55Y–ak1–o=
If you found this explanation helpful and wish to stay informed about how legal developments may affect your rights in Bihar, you may consider following Samvida Law Associates for more updates.
