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

Held

The Court held that the appellate order rejecting the appeal on grounds of limitation was bad in law for two primary reasons. Firstly, it violated the principles of natural justice by not affording the petitioner a fair opportunity of hearing and by not adequately considering the impact of COVID-19 restrictions on the delay. Secondly, the ex parte orders passed by the revenue authorities lacked sufficient reasoning to determine the amount due and payable by the assessee. The Court quashed and set aside the impugned orders. It directed the petitioner to deposit ten percent of the total demand amount (in addition to any amount already deposited as a prerequisite for appeal hearing) 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 of the petitioner's appearance. The Court explicitly stated that it had not expressed any opinion on the merits of the case and all issues were left open. The proceedings were to be conducted through digital mode if possible.

Facts

The petitioner, M/s Aditya Polytechnic Private Limited, challenged 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 June 19, 2019, passed by the Assistant Commissioner of State Tax, Patna, and a summary of order dated August 2, 2019, for the month of March 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 due to COVID-19 restrictions and that they were not afforded a fair opportunity of hearing. The revenue stated it had no objection if the matter was remanded for fresh decision on merits.

Key Issues

1. Whether the appellate order rejecting the petitioner's appeal on grounds of limitation, without considering the impact of COVID-19 restrictions, violates the principles of natural justice, particularly the right to a fair hearing? (Mixed question of law and fact, concerning principles of natural justice and the impact of COVID-19 on procedural timelines). 2. Whether the ex parte orders passed by the revenue authorities lacked sufficient reasoning for determining the tax liability, thereby violating the principles of natural justice? (Mixed question of law and fact, concerning procedural fairness and the adequacy of reasoning in quasi-judicial orders). 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 the ex parte orders were passed in violation of the principles of natural justice, as they were not afforded a fair opportunity of hearing and the orders lacked sufficient reasoning. They relied on the general principles of natural justice and the impact of the pandemic on procedural compliance. Revenue's Arguments: The revenue, through its counsel, stated that it had no objection to the matter being remanded to the Assessing Authority for a fresh decision on merits.