M/S Maa Durga Lubricant Store vs. The State Of Bihar Through Commissioner Cum Secretary State Tax

Held

The Court quashed and set aside the impugned order dated January 9, 2021, passed by the Additional Commissioner of State Tax (Appeal). The Court accepted the revenue's statement and agreed to remand the matter to the Appellate Authority for deciding the appeal afresh on merits. The Court directed that the ground of delay in filing the appeal shall not be taken into account, and the appeal shall be decided on merits after complying with the principles of natural justice. The Court also directed the de-freezing of the petitioner's bank account(s) if attached. The petitioner was directed to deposit ten percent of the total amount as a prerequisite for the appeal hearing, if not already done. The Appellate Authority was instructed to decide the appeal expeditiously, preferably within two months from the petitioner's appearance, and to pass a speaking order. The Court explicitly stated that it had not expressed any opinion on the merits of the case, leaving all issues open.

Facts

The petitioner, M/s Maa Durga Lubricant Store, challenged an order by the Additional Commissioner (Appeal), State Tax, Purnea, dated January 9, 2021, which rejected their appeal against an order dated February 19, 2020, passed by the Assistant Commissioner, State Tax, Saharsa. The appeal was rejected solely on the grounds of being barred by limitation. The petitioner argued that both orders were passed ex parte and without providing an opportunity to be heard. The amount in dispute, including tax and interest, was Rs. 6,98,780/-. The petitioner also sought to quash a notification concerning CGST Rules, 2017, and to declare the levy of tax and interest illegal, claiming entitlement to input tax credit adjustment. The revenue stated it had no objection to the matter being remanded.

Key Issues

1. Whether the impugned order dated January 9, 2021, passed by the Additional Commissioner (Appeal) is illegal and arbitrary for rejecting the petitioner's appeal on grounds of limitation, thereby violating principles of natural justice, particularly in light of the COVID-19 pandemic, and whether this order is contrary to Section 39 of the CGST Act and Rule 61(5) of the CGST Rules, 2017? Petitioner's Contention: The petitioner argued that the delay in filing the appeal was condonable due to the COVID-19 crisis and that the appellate authority failed to consider this, passing an ex parte order without proper opportunity. They also challenged Notification No. 10 of 2017, Central Tax, dated June 28, 2017, issued under Rule 61(5) of the CGST Rules, 2017, as illegal and unconstitutional, and sought to declare the tax and interest levy arbitrary, asserting their right to input tax credit adjustment under Section 16 read with Section 49 of the CGST Act. Revenue's Contention: The Revenue stated it had no objection if the matter was remanded to the Appellate Authority for a fresh decision on merits, without considering the ground of delay, and that no coercive steps would be taken against the petitioner during the pendency of the appeal.