China Petroleum Pipe Line Bureau vs. State Of Bihar

Held

The Court quashed and set aside the impugned order dated 07.10.2021 passed by the Additional Commissioner of State Tax (Appeal) on the short ground that the Appellate Authority had recorded the proceedings to be ex parte in nature despite the petitioner being represented by a counsel, and that the material placed on record was neither adverted to in totality nor dealt with. The Court found this to be a violation of the principles of natural justice. Consequently, the Court directed the Appellate Authority to hear and decide the appeal afresh after affording an opportunity of hearing to all concerned. The petitioner was directed to appear before the Appellate Authority on December 2, 2022, at 10:30 AM. The Appellate Authority was instructed to consider and decide the appeal on merits within two months from the petitioner's appearance, after complying with the principles of natural justice and passing a reasoned and speaking order after allowing the petitioner to place all relevant materials on record. The issue concerning the order dated 17.08.2019 passed by the Dy. Commissioner of Commercial Taxes was not explicitly decided but was implicitly remitted for fresh consideration as part of the appellate process.

Facts

The petitioner, China Petroleum Pipe Line Bureau, challenged two orders. The first order, dated August 17, 2019, was passed ex parte by the Dy. Commissioner of Commercial Taxes under Section 73 of the Bihar Goods and Services Tax Act, 2017. The second order, dated October 7, 2021, was passed by the Additional Commissioner of State Tax (Appeal) dismissing the petitioner's appeal for the period 2017-18 (July 1, 2017, to March 31, 2018) on the grounds of non-appearance. The petitioner contended that despite being represented by counsel, the appellate authority recorded the proceedings as ex parte and failed to consider the material placed on record, violating principles of natural justice. The amount in dispute is not explicitly stated.

Key Issues

1. Whether the order dated 07.10.2021 passed by the Additional Commissioner of State Tax (Appeal) dismissing the petitioner's appeal for non-appearance, without considering the electronic credit ledger and other material, is in violation of the principles of natural justice and fair play, and consequently, whether it is liable to be quashed? (This issue turns on principles of natural justice and procedural fairness in appellate proceedings). 2. Whether the order dated 17.08.2019 passed ex parte by the Dy. Commissioner of Commercial Taxes under Section 73 of the Bihar Goods and Services Tax Act, 2017, is in violation of the principles of natural justice and fair play, and consequently, whether it is liable to be quashed? (This issue turns on Section 73 of the Bihar Goods and Services Tax Act, 2017, and principles of natural justice). Petitioner's arguments: The petitioner argued that both orders were passed in violation of the settled principles of natural justice and fair play. They specifically contended that the appellate authority failed to consider the electronic credit ledger and other material placed on record, and that the proceedings were wrongly recorded as ex parte despite the presence of their counsel. They relied on the judgment of this Court in Commercial Steel Engineering Corporation vs. the State of Bihar in C.W.J.C No. 2125 of 2019. Revenue's arguments: The judgment records no specific arguments made by the respondent State.