M/S Nr Motors Barsoi Katihar vs. The State Of Bihar

Held

The Court held that the impugned orders were bad in law due to two primary reasons: (a) violation of the principles of natural justice, specifically the lack of a fair opportunity of hearing and insufficient time afforded to the petitioner to present their case; and (b) the ex parte nature of the orders, which failed to provide sufficient reasons for determining the amount due. The Court found that the authorities had not adjudicated the matter on the attending facts and circumstances, and all issues of fact and law ought to have been dealt with. Consequently, the Court quashed and set aside the impugned order dated September 24, 2022, the order dated February 5, 2021, and the demand notice dated July 22, 2022. The Court directed the Assessing Authority to decide the case on merits after complying with the principles of natural justice, affording adequate opportunity to all parties, and passing a speaking order within two months. The Court also directed the de-freezing of the petitioner's bank accounts and stated that no coercive steps would be taken during the pendency of the case. The Court explicitly stated that it had not expressed any opinion on merits and all issues were left open.

Facts

The petitioner, M/s NR Motors, through its proprietor Roshana Khatun, filed a writ petition challenging an assessment order dated February 5, 2021, and a demand notice dated July 22, 2022, for the period April to June 2020. The petitioner also challenged an appeal order dated September 24, 2022, which rejected their appeal against the assessment order. The appeal was rejected by the Additional Commissioner of State Taxes (Appeals) on the ground of non-submission of the certified copy of the impugned assessment order. The petitioner sought quashing of these orders, condonation of delay in filing the appeal, and other consequential reliefs. The revenue stated it had no objection if the matter was remanded for fresh decision on merits, without limitation issues hindering it, and without coercive steps during pendency.

Key Issues

1. Whether the impugned orders, including the assessment order, demand notice, and appeal order, are liable to be quashed on grounds of violation of principles of natural justice and lack of sufficient reasoning? (Mixed question of law and fact, concerning principles of natural justice and statutory requirements for assessment orders). Petitioner's Arguments: The petitioner contended that the assessment order was passed ex parte without sufficient opportunity for hearing and lacked adequate reasoning to determine the amount due. The appeal order was also flawed for rejecting the appeal on procedural grounds without considering the merits. The petitioner sought to have these orders set aside. Revenue's Arguments: The Revenue stated it had no objection to the matter being remanded to the Assessing Authority for a fresh decision on merits, with no objection to condoning any delay and refraining from coercive steps during the pendency of the case.