Importance of principles of natural justice, necessity for the Assessing Authority to pass a speaking order assigning reasons, and the right to fair opportunity of hearing.

JUDGMENT :

Sanjay Karol, J.

1. Heard learned counsel for the parties.

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

i. For issuance of writ in the nature of Certiorari quashing the order dated 31.03.2021 under section 31 of Bihar VAT Act passed by Respondent no. 3 whereby and whereby under Respondent no. 3 has imposed Tax amounting Rs.29,88,280.85/- in the Financial year 2015-16 without considering the fact that the petitioner has sub-contracted the entire contract on back to back basis to one M/s PPSL Capacite JV in back to back basis and petitioner had no tax liability on the entire turn over which has been sublet in the light of principle settled by Hon’ble Apex Court in the case of State of Andhra Pradesh Vrs. Larson and Turbo (2008) 9 SCC 191 and respondent in lieu of the above said principle had allowed the previous financial year transaction (2014-15) of the petitioner.

ii. For quashing of demand notice dated 31.03.2021 issued by Respondent no.3 whereby and where under an amount of Rs.29,88,280/- has been imposed against the petitioner.

iii. For issuance of writ in the nature of mandamus directing the respondent authorities specially Respondent no. 3 to considered the case of the petitioner in the light of principle settled by Hon’ble Apex Court in the case of the State of Andhra Pradesh Vrs. Larson and Turbo (2008) 9 SCC 191.

iv. For restarting the respondent authorities from recovery of tax amount from the petitioner till the disposal of the present writ application.

3. Petitioner has prayed for quashing of the impugned order dated 31.03.2021 passed by the Deputy Commissioner, State Tax, Special Circle, Patna in VAT/TIN-10011321013 (Annexure-8) and the Notice of Demand under Section 25 and Section 39 of the Bihar Value Added Tax Act, 2005 [Notice Id: N110182137301242] Annexure- 8/1. The order appears to be ex parte in nature.

4. Shri Anurag Saurav, learned counsel for the petitioner states that 50 per cent of the impugned amount of demand already stands recovered from the petitioner. Additionally, petitioner is willing to deposit 10 per cent of the impugned demand.

5. Statement accepted and taken on record.

6. 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.

7. Statement accepted and taken on record.

8. However, having heard learned counsel for the parties 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.

9. 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.

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

(a) We quash and set aside the impugned order dated 31.03.2021 passed by the Deputy Commissioner, State Tax, Special Circle, Patna in VAT/TIN-10011321013 (Annexure-8) and the Notice of Demand under Section 25 and Section 39 of the Bihar Value Added Tax Act, 2005 [Notice Id: N110182137301242] Annexure- 8/1;

(b) We accept the statement of the petitioner that fifty per cent of the amount of the demand