M/S Shivansh Enterprises vs. The Union Of INDIA Through The Secretary

Held

The Court quashed and set aside the impugned order dated 23.12.2020 passed by the Additional Commissioner of State Tax (Appeal) and the order dated 25.02.2020 passed by the Assistant Commissioner State Taxes, along with the Summary of Order dated 26.02.2020. The Court found that the orders were bad in law for two primary reasons: (a) violation of the principles of natural justice, as the petitioner was not afforded a fair opportunity of hearing and sufficient time to represent their case, and (b) the ex parte orders lacked sufficient reasoning to determine the amount due. The Court accepted the Revenue's statement that they had no objection to a remand for a fresh decision on merits. The Court directed the petitioner to deposit ten percent of the total amount demanded before the Assessing Officer within four weeks, in addition to any amount already deposited as a prerequisite for hearing the appeal. This deposit was to be without prejudice to the rights of the parties. The Court also directed the de-freezing of the petitioner's bank account(s). The Assessing Authority was directed 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 from the petitioner's appearance. No coercive steps were to be taken against the petitioner during this period. The Court explicitly stated that it had not expressed any opinion on the merits of the case and all issues were left open.

Facts

The petitioner, M/s Shivansh Enterprises, filed a writ petition challenging an order dated 23.12.2020 passed by the Additional Commissioner of State Tax (Appeal), Purnea, Bihar. This order rejected the petitioner's appeal against an order dated 25.02.2020 passed by the Assistant Commissioner State Taxes, Purnea Circle, Purnea. The appeal was rejected solely on the grounds of being barred by limitation. Both the original order and the appellate order were ex parte. The tax period in dispute was December 2018-19. The petitioner sought relief from the High Court, arguing that the delay in filing the appeal was sufficiently explained due to COVID-19 restrictions and that the original orders were passed in violation of natural justice.

Key Issues

1. Whether the appeal filed by the petitioner before the Additional Commissioner of State Tax (Appeal) was barred by limitation, considering the COVID-19 pandemic restrictions, and if so, whether the delay was sufficiently explained? (Question of law and fact, turning on principles of limitation and condonation of delay). 2. Whether the orders passed by the Assistant Commissioner State Taxes and the Additional Commissioner of State Tax (Appeal) were in violation of the principles of natural justice, specifically regarding the right to a fair opportunity of hearing and the passing of ex parte orders without sufficient reasoning? (Question of law, turning on principles of natural justice). Petitioner's arguments: The petitioner contended that the delay in filing the appeal was attributable to the COVID-19 restrictions, which prevented them from effectively pursuing their case. They also argued that both the original order and the appellate order were passed ex parte and without providing a sufficient opportunity for hearing, thus violating the principles of natural justice. The petitioner relied on the fact that the orders were ex parte and lacked adequate reasoning to justify the demand. Revenue's arguments: The learned counsel for the Revenue stated that they had no objection if the matter was remanded to the Assessing Authority for a fresh decision on merits, with no coercive steps to be taken against the petitioner during the pendency of the case. The Revenue did not contest the petitioner's claim regarding the delay or the violation of natural justice.