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), as well as the order dated August 7, 2019, and the summary of order dated September 11, 2019, passed by the Assistant Commissioner of State Tax. The Court found that the orders were 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 orders without sufficient reasoning. The Court accepted the petitioner's statement that ten percent of the total amount, a prerequisite for hearing the appeal, had been deposited, and directed that if not deposited, it should be done before the next date. The petitioner was also directed to deposit an additional ten percent of the demand within four weeks. The Court ordered 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. 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). This order rejected the petitioner's appeal against an order dated August 7, 2019, passed by the Assistant Commissioner of State Tax, and a summary of order dated September 11, 2019, for the month of June 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 principles of natural justice without sufficient opportunity for hearing or adequate reasoning.

Key Issues

1. Whether the appeal filed by the petitioner was barred by limitation, considering the COVID-19 restrictions, under the relevant provisions of the CGST/BGST Rules, 2017? 2. Whether the ex parte orders passed by the Assistant Commissioner and the Additional Commissioner of State Tax violated the principles of natural justice by not affording a fair opportunity of hearing to the petitioner and by not providing sufficient reasons for determining the amount due? Petitioner's Arguments: The petitioner argued that the delay in filing the appeal was adequately explained by the COVID-19 restrictions. They further contended that the orders were passed ex parte, violating the principles of natural justice, as they were not given sufficient time to present their case and the orders lacked adequate reasoning for 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.