Allowed

Sanrachna Homes Private Limited v. The State of Bihar

Patna HC5 Apr 2022CWJC/3783/2022

Case brief

AI extract

What is this about?

The Patna High Court quashed ex parte tax demand orders for violating natural justice principles. The petition allowed was subject to conditions for deposit, de-freezing of accounts, and remanding the case for a speaking order on merits within two months.

What did the court decide?

Impugned orders quashed; case remanded for speaking order on merits; accounts de-frozen; coercive actions stayed; contingent deposit mandated.

Sanrachna Homes Private Limited Vs The State of Bihar — GST and Indirect Tax | Patna HC (2022)

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IN THE HIGH COURT OF JUDICATURE AT PATNA Civil Writ Jurisdiction Case No.3783 of 2022

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Sanrachna Homes Private Limited having its Registered Office at Flat No. 302, Bina Menson, Nageshwar Colony, Boring Road, Patna, Bihar, through its Director Manoj Kumar Singh, aged about 52 years, male, son of Late Arjun Singh, resident of 305, Vidyakunj Apartment, P.S. S.K. Puri, District-Patna.

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... ... Petitioner/s

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Versus

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The State of Bihar through the Commissioner of State Tax cum Secretary, Bihar, Patna.

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The Additional Commissioner (Appeal) Central Division, Patna, Bihar.

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The Assistant Commissioner of State Tax, Patna Special Circle, Patna, Bihar.

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... ... Respondent/s

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====================================================== Appearance : For the Petitioner/s : Mr.Prabhat Ranjan, Advocate For the Respondent/s : Mr.Vivek Prasad (GP7) ====================================================== CORAM: HONOURABLE THE CHIEF JUSTICE and HONOURABLE MR. JUSTICE S. KUMAR

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ORAL JUDGMENT

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(Per: HONOURABLE THE CHIEF JUSTICE)

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Date : 01-04-2022

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Heard learned counsel for the parties.

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Petitioner has prayed for the following relief(s):-

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“(i) Quashing of the order dated 07.03.2020 vide reference No. ZA1003200104502 under section 73 of the Act by which, the petitioner has been directed to deposit an amount of Rs. 17,22,582/- as Tax, Interest and penalty for the Tax period March-2019-March-2019 corresponding to Financial Year 2018-19;

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(ii) Quashing of the Appellate order dated

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Patna High Court CWJC No.3783 of 2022 dt.01-04-2022 2/7

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01.04.2021 as communicated vide Memo No. 255 in Appeal Case No. AD100620000842X whereby the Appeal preferred by the petitioner has been rejected and the Demand Order passed by the Assistant Commissioner dated 07.03.202 has been upheld;

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(iii) Restraining the Respondents from giving effect to and taking any coercive action in connection with order No. ZD1004210001800 dated 01.04.2021 during the pendency of the present writ petition.”

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It is brought to our notice that vide impugned order dated 01.04.2021, passed by the Respondent No. 2, namely, the Additional Commissioner (Appeal) Central Division, Patna, in Appeal Case No. AD100620000842X (GSTIN No.10AAWCS9841A1ZA); summary of demand issued in Form GST APL-04 dated 01.04.2021 vide reference No.ZD1004210001800, the appeal of the petitioner against the order dated 07.03.2020, passed by Respondent No. 3, namely (Reference No. ZA1003200104502), the Assistant Commissioner of State Tax, Patna Special Circle, Patna, Bihar; has been rejected by a cryptic, misconceived and non-speaking order.

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Learned counsel for the Revenue, states that he has no objection if the matter is remanded to the Assessing Authority for deciding the case afresh. Also, the case shall be decided on merits. Also, during pendency of the case, no coercive steps shall be taken against the petitioner.

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Patna High Court CWJC No.3783 of 2022 dt.01-04-2022 3/7

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Statement accepted and taken on record.

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However, having heard learned counsel for the parties

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as also perused the record made available, we are of the considered view that this Court, notwithstanding the statutory remedy, is not precluded from interfering where, ex facie , we form an opinion that the order is bad in law. This we say so, for two reasons- (a) violation of principles of natural justice, i.e. Fair opportunity of hearing. No sufficient time was afforded to the petitioner to represent his case; (b) order passed ex parte in nature, does not assign any sufficient reasons even decipherable from the record, as to how the officer could determine the amount due and payable by the assessee. The order, ex parte in nature, passed in violation of the principles of natural justice, entails civil consequences; (c) We also find the authorities not to have adjudicated the matter on the attending facts and circumstances. All issues of fact and law ought to have been dealt with, even if the proceedings were ex parte in nature.

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As such, on this short ground alone, we dispose of the present writ petition in the following mutually agreeable terms:

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(a) We quash and set aside the impugned order dated 01.04.2021, passed by the Respondent No. 2, namely, the Additional Commissioner (Appeal) Central Division, Patna, in

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Patna High Court CWJC No.3783 of 2022 dt.01-04-2022 4/7

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Appeal Case No. AD100620000842X (GSTIN No.10AAWCS9841A1ZA); summary of demand issued in Form GST APL-04 dated 01.04.2021 vide reference No.ZD1004210001800, order dated 07.03.2020, passed by Respondent No. 3, namely (Reference No. ZA1003200104502), the Assistant Commissioner of State Tax, Patna Special Circle, Patna, Bihar;

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(b) We accept the statement of the petitioner that ten per cent of the total amount, being condition prerequisite for hearing of the appeal, already stands deposited. If that were so, well and good. However, if the amount is not deposited for whatever reason(s), same shall be done before the next date;

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(c) Further the petitioner undertakes to additionally deposit ten per cent of the amount of the demand raised before the Assessing Officer. This shall be done within four weeks.

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(d) This deposit shall be without prejudice to the respective rights and contention of the parties and subject to the order passed by the Assessing Officer. However, if it is ultimately found that the petitioner’s deposit is in excess, the same shall be refunded within two months from the date of passing of the order;

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Patna High Court CWJC No.3783 of 2022 dt.01-04-2022 5/7

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(e) We also direct for de-freezing/de-attaching of the bank account(s) of the writ-petitioner, if attached in reference to the proceedings, subject matter of present petition. This shall be done immediately.

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(f) Petitioner undertakes to appear before the Assessing Authority on 20.04.2022 at 10:30 A.M., if possible through digital mode;

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(g) The Assessing Authority shall decide the case on merits after complying with the principles of natural justice;

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(h) Opportunity of hearing shall be afforded to the parties to place on record all essential documents and materials, if so required and desired;

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(i) During pendency of the case, no coercive steps shall be taken against the petitioner.

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(j) The Assessing Authority shall pass a fresh order only after affording adequate opportunity to all concerned, including the writ petitioner;

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(k) Petitioner through learned counsel undertakes to fully cooperate in such proceedings and not take unnecessary adjournment;

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(l) The Assessing Authority shall decide the case on merits expeditiously, preferably within a period of two

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Patna High Court CWJC No.3783 of 2022 dt.01-04-2022 6/7

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months from the date of appearance of the petitioner;

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(m) The Assessing Authority shall pass a speaking order, assigning reasons, copy whereof shall be supplied to the parties;

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(n) Liberty reserved to the petitioner to challenge the order, if required and desired;

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(o) Equally, liberty reserved to the parties to take recourse to such other remedies as are otherwise available in accordance with law;

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(p) We are hopeful that as and when petitioner takes recourse to such remedies, before the appropriate forum, the same shall be dealt with, in accordance with law, with a reasonable dispatch;

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(q) We have not expressed any opinion on merits and all issues are left open;

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(r) If possible, proceedings during the time of current Pandemic [Covid-19] be conducted through digital mode;

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The instant petition sands disposed of in the aforesaid terms.

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Interlocutory Application(s), if any, also stands disposed of.

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Patna High Court CWJC No.3783 of 2022 dt.01-04-2022 7/7

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Learned counsel for the respondents undertakes to communicate the order to the appropriate authority through

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electronic mode.

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(Sanjay Karol, CJ)

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( S. Kumar, J)

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ranjan/-

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Sanrachna Homes Private Limited v. The State of Bihar

Case brief

What is this about?

What did the court decide?

Sanrachna Homes Private Limited v. The State of Bihar

Case brief

What is this about?

What did the court decide?

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