M/S. Aditya Polytechnic Private Limited vs. The State Of Bihar

Held

The Court held that the delay in filing the appeal was sufficiently explained due to COVID-19 restrictions. Furthermore, the Court found that the orders passed by the respondents 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 and payable by the assessee. The Court emphasized that ex parte orders passed in violation of natural justice entail civil consequences. Consequently, the Court quashed and set aside the impugned order dated March 18, 2020, and the order dated October 14, 2019, along with the summary of order dated October 16, 2019. The Court directed the petitioner to deposit 10% of the total amount demanded (if not already deposited) and an additional 10% of the demand within four weeks, without prejudice to their rights. The bank accounts of the petitioner were ordered to be de-frozen. 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 of 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. Aditya Polytechnic Private Limited, filed a writ petition challenging an order dated March 18, 2020, passed by the Additional Commissioner of State Tax (Appeals), Patna. This order rejected the petitioner's appeal against an order dated October 14, 2019, passed by the Assistant Commissioner of State Tax, Patna, and a summary of order dated October 16, 2019, for the month of August 2019. 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 petitioner contended that the delay in filing the appeal was sufficiently explained due to COVID-19 restrictions and that the orders were passed in violation of principles of natural justice, without adequate opportunity for hearing and without sufficient reasoning.

Key Issues

1. Whether the appeal filed by the petitioner before the Additional Commissioner of State Tax (Appeals) was barred by limitation, considering the COVID-19 restrictions, and if so, whether the delay was sufficiently explained? 2. Whether the orders passed by the Assistant Commissioner of State Tax and the Additional Commissioner of State Tax (Appeals) were in violation of the principles of natural justice, specifically concerning the right to a fair opportunity of hearing and the requirement for reasoned orders? Petitioner's Arguments: The petitioner argued that the delay in filing the appeal was attributable to the COVID-19 pandemic and its associated restrictions, which prevented them from presenting their case effectively. They further contended that both the original order and the appellate order were passed ex parte, without affording them a sufficient opportunity to be heard, and that these orders lacked adequate reasoning to justify the demand raised. 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. They also agreed that no coercive steps would be taken against the petitioner during the pendency of the case.