Simplified Explanation of the Judgment
In a recent case, the Patna High Court ruled in favor of a petitioner who had challenged an ex parte assessment order passed under the GST regime. The court quashed the order issued by the Assistant Commissioner of State Tax, North Circle, Patna, observing that it was issued without following the principles of natural justice.
The petitioner, a registered business, was served with a summary order under Form GST DRC-07 dated 09.01.2021. This order was passed without giving the petitioner a fair opportunity to present their case. The petitioner approached the High Court seeking quashing of this order on the grounds that it was arbitrary, lacked reasoning, and caused significant financial consequences including freezing of bank accounts.
During the hearing, the State’s counsel did not oppose the idea of sending the case back for reconsideration. After reviewing the matter, the Hon’ble Chief Justice and Hon’ble Mr. Justice Partha Sarthy held that even though there are statutory remedies available under GST law, courts can intervene if an order is clearly unjust or passed without proper hearing.
The High Court noted two main problems:
- The order was passed without giving the petitioner sufficient opportunity to be heard.
- It lacked detailed reasoning to justify the amount claimed as tax liability.
The court emphasized that even ex parte orders should reflect thoughtful consideration of facts and law. As such, it set aside the GST demand order and directed a fresh adjudication.
The petitioner was directed to deposit 20% of the demand raised within four weeks without prejudice to their rights. The authorities were ordered to de-freeze the petitioner’s bank accounts immediately. The petitioner was asked to appear before the Assessing Authority on a specific date, with proceedings to be completed within two months. All parties were assured an opportunity to submit evidence and be heard before a new decision is made.
Significance or Implication of the Judgment
This judgment is significant for small and medium businesses in Bihar and across India who may face arbitrary GST assessments. The High Court has reaffirmed that tax authorities must adhere to principles of natural justice, especially when issuing orders that can impact business operations or freeze bank accounts.
The ruling sends a clear message that procedural fairness is essential, and authorities cannot bypass due process. It also highlights that courts remain a recourse for aggrieved taxpayers even when statutory remedies exist.
Legal Issue(s) Decided and the Court’s Decision
- Whether ex parte GST assessment orders can be quashed for violating natural justice
✔ Yes. The order was set aside due to lack of opportunity and insufficient reasoning. - Whether the High Court can interfere despite statutory remedies under GST
✔ Yes. The court held it can intervene where the order is patently unfair or unlawful. - What procedural steps must follow a remand in such cases
✔ Fresh hearing with proper notice, opportunity to be heard, speaking order, and timely disposal..
Case Title
M/s Ghar Ghar Ki Awaz vs. 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 — Advocate 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.
