Sohan Rai vs. The State Of Bihar

Facts

The petitioner, Sohan Rai, challenged an order dated February 11, 2021, passed by the Additional Commissioner of State Taxes (Appeals), Patna West, which rejected his appeal against an order dated March 6, 2020, passed by the Assistant Commissioner of State Taxes, Buxar Circle. The appeal was rejected solely on the grounds of being barred by limitation. Both the original order and the summary of order were ex parte. The petitioner argued that the delay in filing the appeal was sufficiently explained due to COVID-19 restrictions and prior orders of the High Court. The revenue stated it had no objection if the matter was remanded to the Assessing Authority for a fresh decision on merits, with no coercive steps taken against the petitioner during the pendency.

Held

The Court quashed and set aside the impugned order dated February 11, 2021, passed by the Additional Commissioner of State Taxes (Appeals), and the order dated March 6, 2020, passed by the Assistant Commissioner of State Taxes, along with the summary of order. The Court found that the delay in filing the appeal was sufficiently explained due to COVID-19 restrictions. Furthermore, the Court held that the original ex-parte order was passed in violation of the principles of natural justice, as the petitioner was not afforded a fair opportunity of hearing and the order lacked sufficient reasoning. The Court directed the petitioner to deposit ten percent of the total amount demanded, if not already done, and an additional ten percent of the demand within four weeks. The bank accounts of the petitioner were to be de-frozen immediately. 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 fresh order expeditiously, preferably within two months. No coercive steps were to be taken against the petitioner during the pendency of the proceedings. The Court explicitly stated that it had not expressed any opinion on the merits of the case, leaving all issues open.

Key Issues

1. Whether the appeal filed by the petitioner against the order dated March 6, 2020, was barred by limitation, considering the COVID-19 pandemic and the High Court's orders in CWJC No. 5633 of 2020? 2. Whether the ex-parte order dated March 6, 2020, passed by the Assistant Commissioner of State Taxes, was a speaking order, considering the credit balance in the electronic credit ledger and the figures of taxable outward supplies disclosed in the returns? Petitioner's Arguments: - The delay in filing the appeal was justified due to COVID-19 restrictions and the High Court's orders extending limitation periods. Reliance was placed on the High Court's Full Bench orders in CWJC No. 5633 of 2020. - The original order dated March 6, 2020, was cryptic, non-speaking, and passed without considering relevant financial details, thus violating principles of natural justice. 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.