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

Held

The Court quashed and set aside the impugned order dated March 18, 2020, passed by the Additional Commissioner of State Tax (Appeals), and the order dated July 24, 2019, passed by the Assistant Commissioner of State Tax, along with the summary of order dated August 27, 2019. The Court found that the orders were bad in law due to the violation of the principles of natural justice, specifically the lack of a fair opportunity of hearing and the ex parte nature of the orders without sufficient reasoning. The Court also noted that the delay was sufficiently explained due to COVID-19 restrictions. The Court directed the petitioner to deposit an additional ten percent of the demanded amount within four weeks, without prejudice to the rights and contentions of the parties. The bank account(s) of the petitioner were ordered to be de-frozen. The petitioner was directed to appear before the Assessing Authority on October 25, 2021, and the Assessing Authority was directed to decide the case on merits expeditiously, preferably within two months, after affording adequate opportunity of hearing and passing a speaking order. The Court explicitly stated that no opinion was expressed 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 the order dated March 18, 2020, passed by the Additional Commissioner of State Tax (Appeals), Patna. This order rejected the petitioner's appeal against the order dated July 24, 2019, passed by the Assistant Commissioner of State Tax, Gandhi Maidan Jurisdiction, Patna, and the summary of order dated August 27, 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 was sufficiently explained due to COVID-19 restrictions and that the orders were passed in violation of the principles of natural justice, lacking sufficient reasons.

Key Issues

1. Whether the appeal filed by the petitioner before the Additional Commissioner of State Tax (Appeals) was rightly rejected on the grounds of limitation, considering the prevailing COVID-19 restrictions, thereby raising a question of law concerning the application of limitation periods during extraordinary circumstances? 2. Whether the orders passed by the Assistant Commissioner of State Tax and the Additional Commissioner of State Tax (Appeals) were bad in law due to violation of the principles of natural justice, specifically the right to a fair opportunity of hearing and the passing of ex parte orders without sufficient reasoning, thus raising a mixed question of law and fact? Petitioner's Arguments: The petitioner argued that the delay in filing the appeal was sufficiently explained by the COVID-19 restrictions. They also contended that both the original order and the appellate order were passed ex parte and lacked sufficient reasoning, violating the principles of natural justice. The petitioner relied on the fact that they had deposited ten percent of the total amount as a prerequisite for hearing the appeal. 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 deciding the case afresh on merits. The Revenue did not present any arguments against the petitioner's claims regarding the violation of natural justice or the explanation for the delay.