M/S Arihant Trading vs. The State Of Bihar Through The Principal Secretary Cum Commissioner

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. The original order dated March 6, 2020, and the summary of order were ex-parte. The petitioner sought to quash both orders, arguing that the rejection of his appeal was erroneous, considering the COVID-19 pandemic and previous court orders extending limitation periods. He also contended that the original order was cryptic, non-speaking, and passed without considering his admitted figures and credit ledger balances.

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 original 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. The Court also held that the original ex-parte order was bad in law due to a 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, without prejudice to the rights of the parties. The bank accounts of the petitioner were ordered 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 preferably within two months from the petitioner's appearance. No coercive steps were to be taken against the petitioner during this period. The Court expressly 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 orders of this Hon'ble Court in CWJC No. 5633 of 2020 (Question of law and fact, turning on the interpretation of limitation extension due to pandemic and court orders). 2. Whether the ex-parte order dated March 6, 2020, passed by the Assistant Commissioner of State Taxes, was bad in law for being cryptic, non-speaking, and passed without proper application of mind to the petitioner's admitted figures and electronic credit ledger balance (Question of law, turning on principles of natural justice and proper assessment procedures). Petitioner's Arguments: The petitioner argued that the delay in filing the appeal was sufficiently explained by the COVID-19 pandemic and the Full Bench orders of this Court in CWJC No. 5633 of 2020, which extended limitation periods. He contended that the appellate order rejecting the appeal on limitation grounds was bad in law. Furthermore, the original order dated March 6, 2020, was passed ex-parte, lacked sufficient reasoning, did not consider his credit ledger balance, and was therefore a violation of natural justice. He relied on the principles of natural justice and the court's previous pronouncements regarding pandemic-related delays. Revenue's Arguments: The learned counsel for the Revenue stated that he had no objection if the matter was remanded to the Assessing Authority for deciding the case afresh on merits, and that no coercive steps would be taken against the petitioner during the pendency of the case.