M/S Patna Offset Press vs. The State Of Bihar

Facts

The petitioner filed a writ petition challenging two orders dated February 11, 2021, and February 12, 2021, passed by the Additional Commissioner, State Taxes (Appeal), Patna. These orders rejected the petitioner's appeal against an order dated March 5, 2020, passed by the Assistant Commissioner of State Tax, Kadam Kuan, Patna. The appeals were rejected solely on the grounds of being barred by limitation. Both appellate orders were ex parte. The petitioner argued that the delay in filing the appeal was sufficiently explained due to COVID-19 restrictions. The Revenue stated it had no objection to the matter being remanded to the Assessing Authority for a fresh decision on merits, with no coercive steps to be taken against the petitioner during the pendency of the case.

Held

The Court held that the delay in filing the appeal was sufficiently explained due to COVID-19 restrictions. The Court found that the impugned orders were bad in law on two grounds: (a) violation of the principles of natural justice, as the petitioner was not afforded a fair opportunity of hearing and sufficient time to represent their case, and (b) the ex parte orders lacked sufficient reasoning to determine the amount due and payable by the assessee. The Court quashed and set aside the impugned orders of the Additional Commissioner, State Taxes (Appeal), Patna, and the order of the Assistant Commissioner of State Tax, Kadam Kuan, Patna. The Court directed the petitioner to deposit ten percent of the demand raised by the Assessing Officer within four weeks, without prejudice to their rights. The bank accounts of the petitioner were to be de-frozen. The petitioner was directed to appear before the Assessing Authority on August 9, 2021, and 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 without taking coercive steps during the pendency of the case. The Assessing Authority was to decide the case expeditiously, preferably within two months. The Court explicitly stated that it had not expressed any opinion on merits and all issues were left open.

Key Issues

1. Whether the delay in filing the appeal before the Additional Commissioner, State Taxes (Appeal), Patna, was sufficiently explained due to COVID-19 restrictions, and if the rejection of the appeal on grounds of limitation, without considering this explanation, violates the principles of natural justice? (Question of law and fact, concerning the interpretation and application of principles of natural justice and the impact of COVID-19 restrictions). Petitioner's Arguments: The delay was due to COVID-19 restrictions, and the ex parte rejection of the appeal without sufficient opportunity for hearing or proper reasoning violated the principles of natural justice. The orders passed were bad in law as they lacked sufficient reasons for determining the amount due. Revenue's Arguments: The Revenue stated it had no objection to the matter being remanded to the Assessing Authority for a fresh decision on merits and agreed that no coercive steps would be taken against the petitioner during the pendency of the case.