Avinash Kumar vs. The Union Of INDIA

Held

The Court quashed and set aside the impugned order dated February 11, 2021, passed by the Additional Commissioner of State Tax (Appeal), and also the order dated March 4, 2020, passed by the Assistant Commissioner of State Tax, and a further order dated March 6, 2020. The Court found that the appellate order was bad in law due to a violation of the principles of natural justice, specifically the lack of a fair opportunity of hearing and the ex parte nature of the order without sufficient reasoning. The Court accepted the petitioner's statement that ten percent of the total amount had been deposited as a prerequisite for hearing the appeal and directed further deposit of another ten percent of the demand within four weeks, without prejudice to the rights of the parties. The Court also directed de-freezing of the petitioner's bank accounts. 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. 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, leaving all issues open.

Facts

The petitioner, Avinash Kumar, proprietor of M/s Avinash Kumar, filed a writ petition challenging an order dated February 11, 2021, passed by the Additional Commissioner of State Tax (Appeal), Patna West Division. This appellate order had rejected the petitioner's appeal against an order dated March 4, 2020, passed by the Assistant Commissioner of State Tax, Patna Central, Patna West, solely on the grounds of limitation. The petitioner contended that the delay in filing the appeal was sufficiently explained due to COVID-19 restrictions. The Revenue stated it 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 High Court noted that the appellate order was passed ex parte and lacked sufficient reasoning.

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 restrictions, and if the delay was sufficiently explained? (Mixed question of law and fact) 2. Whether the impugned appellate order, rejecting the appeal on limitation, was passed in violation of the principles of natural justice, specifically the right to a fair opportunity of hearing and adequate reasoning? (Question of law) Petitioner's Arguments: The petitioner argued that the delay in filing the appeal was attributable to the prevailing COVID-19 restrictions, which ought to have been considered by the appellate authority. The petitioner also contended that the appellate order was passed ex parte without affording a sufficient opportunity to present their case and lacked adequate reasoning, thus violating principles of natural justice. 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. The Revenue also agreed that no coercive steps should be taken against the petitioner during the pendency of the case.