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

Held

The High 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 September 11, 2019, passed by the Assistant Commissioner of State Tax. The Court found that the orders were passed ex parte and in violation of the principles of natural justice, as the petitioner was not afforded a fair opportunity of hearing and the orders lacked sufficient reasoning. The Court accepted the petitioner's statement that 20% of the total amount had already been deposited and directed the petitioner to deposit an additional 10% of the demand within four weeks, without prejudice to the rights of the parties. The Court also directed the 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 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 Aditya Polytechnic Private Limited, filed a writ petition challenging an order dated March 18, 2020, passed by the Additional Commissioner of State Tax (Appeals). This order rejected the petitioner's appeal against an order dated September 11, 2019, passed by the Assistant Commissioner of State Tax. 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 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 orders were passed in violation of natural justice principles.

Key Issues

1. Whether the delay in filing the appeal before the Additional Commissioner of State Tax (Appeals) was sufficiently explained due to COVID-19 restrictions, and if so, whether the appellate authority erred in rejecting the appeal on grounds of limitation, thereby violating the 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 pursuing their statutory remedy within the prescribed time. They argued that both the original order and the appellate order were passed ex parte without affording a fair opportunity of hearing, and that the appellate order lacked sufficient reasoning. They relied on the principle that orders passed in violation of natural justice entail civil consequences. 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 fresh decision on merits. The Revenue did not contest the petitioner's plea regarding the delay or the violation of natural justice.