In a significant ruling, the Patna High Court set aside an ex parte tax demand issued under the Goods and Services Tax (GST) regime, reinforcing the importance of fair hearing and due process in tax assessments. The case revolved around an order issued by the Assistant Commissioner of State Tax, North Circle, Patna, which was passed without granting the petitioner a reasonable opportunity to be heard.
The petitioner, a media business operating in Patna, challenged the tax demand and summary order dated 09.01.2021, citing that it was issued in violation of natural justice and without adequate reasoning. The impugned order had been issued unilaterally and imposed a financial liability without properly explaining the basis for the calculation.
During the hearing, the State Revenue counsel did not object to the matter being remanded for fresh adjudication, showing willingness to rectify the procedural lapse. The Court found this position acceptable but emphasized that despite the availability of statutory remedies, a writ court can interfere when a decision is manifestly unjust or procedurally flawed.
The Court held that the order in question was legally untenable for two main reasons:
- The petitioner was not afforded adequate opportunity to present its side — a core tenet of natural justice.
- The ex parte order did not explain how the tax liability was assessed, nor did it address the facts and legal contentions involved.
Recognizing the civil consequences of such an order, the Court quashed it and laid down a structured remedial approach:
- The petitioner must deposit 20% of the demand amount within four weeks.
- The matter is remanded to the Assessing Authority for fresh hearing and decision, strictly in adherence to principles of natural justice.
- The petitioner’s bank account, if frozen due to the proceedings, is to be de-freezed immediately.
- The petitioner is required to appear before the Assessing Authority, preferably through digital mode.
- The authority must complete adjudication within two months and issue a reasoned speaking order.
- Until final disposal, no coercive action shall be taken.
The Court also ensured that both parties retained the liberty to pursue further legal remedies as available under law. Importantly, the Court refrained from expressing any opinion on the merits of the case, keeping the proceedings impartial and focused on procedural integrity.
Significance or Implication of the Judgment
This judgment is crucial for taxpayers and authorities alike. It reiterates that even under statutory frameworks like GST, due process and natural justice cannot be bypassed. For the general public, it reinforces the idea that procedural lapses by authorities can be challenged effectively. For government departments, it serves as a reminder to adhere to lawful procedures, particularly when imposing civil liabilities. The ruling promotes fairness in tax administration and encourages digital hearings where feasible.
Legal Issue(s) Decided and the Court’s Decision
- Was the ex parte GST demand order legally sustainable?
➤ No. It violated principles of natural justice and lacked reasoning. - Can the Court interfere despite available alternative remedies?
➤ Yes. Where orders are ex facie bad in law or unjust, writ jurisdiction can be invoked. - What relief was granted?
➤ The order was quashed. Fresh adjudication was ordered with safeguards, including a stay on coercive steps and restoration of bank accounts.
Case Title
M/s Ghar Ghar Ki Awaz v. 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 — for the petitioner
Mr. Vikash Kumar, SC-11 — for the respondents
Link to Judgment
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