Preserve Tele INDIA Private Limited vs. The State Of Bihar

Facts

The petitioner filed a writ petition seeking a direction to hear their case after condonation of delay in filing an appeal. The petitioner had filed an application under Section 117 of the CGST Act, 2017, against an appellate order dated July 7, 2020, which was based on an assessment order dated July 8, 2019. The appeal was rejected solely on the ground of delay. Both the assessment order and the appellate order were ex parte. The petitioner argued that the delay was sufficiently explained due to COVID restrictions. The Revenue stated it had no objection if the matter was remanded for fresh decision on merits, with no coercive steps 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 restrictions. Furthermore, the Court found the ex parte orders to be bad in law for two primary reasons: (a) violation of the principles of natural justice, specifically the lack of a fair opportunity of hearing and insufficient time afforded to the petitioner to represent their case; and (b) the ex parte nature of the orders, which lacked sufficient reasoning for determining the amount due and payable by the assessee. The Court quashed and set aside the impugned appellate order dated July 7, 2020, the assessment order dated July 8, 2019, and the Summary of Order in Form GST DRC-07 dated August 27, 2019. The Court directed the petitioner to deposit ten percent of the total amount (if not already deposited) before the next date and to additionally deposit ten percent of the demand raised before the Assessing Officer within four weeks, without prejudice to the parties' rights. The Court also directed 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 concerned, and passing a fresh order expeditiously, preferably within two months. 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.

Key Issues

1. Whether the delay in filing the appeal before the appellate authority was sufficiently explained due to COVID restrictions, warranting condonation? (Question of fact and law, turning on principles of natural justice and administrative convenience during the pandemic). 2. Whether the ex parte assessment order and appellate order, passed without sufficient opportunity of hearing and without adequate reasoning, are liable to be quashed on grounds of violating principles of natural justice and civil consequences? (Question of law, turning on principles of natural justice and procedural fairness). Petitioner's Arguments: The delay in filing the appeal was due to COVID restrictions. The assessment and appellate orders were ex parte and passed without sufficient opportunity of hearing and without adequate reasoning, thus violating principles of natural justice and entailing civil consequences. Revenue's Arguments: The Revenue stated it had no objection to the matter being remanded to the Assessing Authority for deciding the case afresh on merits and that no coercive steps should be taken against the petitioner during the pendency of the case.