National Insuranc Co LTD vs. The State Of Bihar

Facts

The petitioner, National Insurance Co Ltd, filed a writ petition challenging an appellate order dated 13.11.2021 passed by the Additional Commissioner of State Taxes (Appeal), Patna, which rejected their appeal. This appeal was against an order dated 24.02.2021 passed by the Assistant Commissioner of State Taxes, Patliputra Circle, Patna. The petitioner contended that the appellate order failed to appreciate the factual and legal issues raised in their appeal. The revenue, represented by the learned counsel for the State, had no objection to the matter being remanded to the Assessing Authority for a fresh decision on merits, with a direction that no coercive steps would be taken against the petitioner during the pendency of the case.

Held

The Court quashed and set aside both the appellate order dated 13.11.2021 passed by the Additional Commissioner of State Taxes (Appeal) and the original order dated 24.02.2021 passed by the Assistant Commissioner of State Taxes. The Court's decision was based on 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 present their case, and (b) the ex parte nature of the order which did not provide sufficient reasoning for determining the amount due. The Court found these grounds sufficient to interfere despite the availability of statutory remedies. The Court directed that ten percent of the total amount, if not already deposited as a prerequisite for appeal hearing, should be deposited. It also ordered the de-freezing/de-attaching 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 parties, and passing a speaking order within two months of the petitioner's appearance. 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, leaving all issues open.

Key Issues

1. Whether the appellate order dated 13.11.2021, passed by the Additional Commissioner of State Taxes (Appeal), is liable to be quashed for failing to appreciate the factual and legal issues raised by the petitioner in appeal? (Question of law and fact) 2. Whether the order dated 24.02.2021, passed by the Assistant Commissioner of State Taxes under Section 73 of the Bihar Goods And Services Tax Act, 2017, is erroneous due to lack of proper proceedings under Section 61 of the Bihar Act 2017 read with the Central Act 2017? (Question of law) Petitioner's arguments: The petitioner argued that the appellate order was passed without appreciating the factual and legal issues they raised. They also contended that the order passed by the Assistant Commissioner was an erroneous exercise of jurisdiction as it was not preceded by proceedings under Section 61 of the Bihar Goods And Services Tax Act, 2017, read with the Central Goods And Services Tax Act, 2017. Furthermore, the petitioner claimed a violation of the principles of natural justice, specifically a lack of fair opportunity of hearing and insufficient time to represent their case, leading to an ex parte order without sufficient reasoning. Revenue's arguments: The learned counsel for the Revenue stated that they 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.