M/S Sitaram Rajesh Kumar vs. The State Of Bihar Through The Principal Secretary Cum Commissioner
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The petitioner, M/S Sitaram Rajesh Kumar, challenged an order dated March 21, 2020, passed by the Assistant Commissioner of State Tax, Munger, under Section 74 of the Bihar GST Act, 2017, for the period April 1, 2018, to March 31, 2019. This order, along with a demand notice, was ex parte. The petitioner's appeal against this order was dismissed by the Additional Commissioner of State Tax, Bhagalpur, on February 27, 2021, primarily on grounds of limitation. The petitioner contended that the dismissal violated principles of natural justice due to lack of proper hearing and communication. The petitioner also sought the quashing of an order attaching their bank account, which was hindering business operations.
Held
The Court quashed and set aside the impugned order dated February 27, 2021, passed by the Additional Commissioner of State Tax, Bhagalpur. The Court accepted the statement that ten percent of the total amount, a prerequisite for hearing the appeal, had already been deposited. The appeal was to be decided on merits, and if the deposit was not made, it was to be done before the next date. This deposit was to be without prejudice to the parties' rights and subject to the Appellate Authority's order, with any excess deposit to be refunded within two months. The Court directed the de-freezing/de-attaching of the petitioner's bank account(s). The petitioner was directed to appear before the Appellate Authority on August 18, 2021, and the Appellate Authority was directed to condone the delay, comply with principles of natural justice, afford opportunities for submitting documents, and decide the appeal on merits expeditiously, preferably within two months, passing a speaking order. No coercive steps were to be taken against the petitioner during the pendency of the appeal. The Court explicitly stated that it had not expressed any opinion on merits and all issues were left open.
Key Issues
1. Whether the dismissal of the petitioner's appeal by the Additional Commissioner of State Tax, Bhagalpur, on grounds of limitation, without considering the impact of COVID-19 restrictions, violated the principles of natural justice, particularly in light of the ex parte nature of the original order passed by the Assistant Commissioner of State Tax under Section 74 of the Bihar GST Act, 2017? Petitioner's arguments: The petitioner argued that both the original order and the appellate order were ex parte and that they were denied a proper opportunity of hearing. They contended that the delay in filing the appeal was sufficiently explained by COVID-19 restrictions and that the appellate authority failed to consider this, thereby violating principles of natural justice. They also highlighted that their reply submitted in Form GST ASMT-11 was not responded to, and no hearing was fixed before passing the impugned orders. Revenue's arguments: The Revenue stated that they had no objection if the matter was remanded to the Appellate Authority for deciding the appeal afresh, without taking the ground of delay into account and deciding on merits. They also agreed that no coercive steps should be taken against the petitioner during the pendency of the appeal.
Sections Cited
Section 74, Section 50
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Cause title — parties, addresses and appearances
ORAL JUDGMENT (Per: HONOURABLE THE CHIEF JUSTICE) Date : 07-07-2021 Petitioner has prayed for the following relief(s) “a) For issuance of a writ in the nature of certiorari for quashing of the order dated 21.03.2020 contained in Annexure-3 passed by Assistant Commissioner of State Tax Munger Circle Munger, u/s 74 of Bihar GST Act 2017 for the period of 1.4.2018 to 31.3.20219 (2018-2019) and as well as quashing connected demand notice in form GST DRC-07 dated 21.03.2020 contained in Annexure-4 in pursuance of order dated 18.3.2020 by exercising the powers under section 74(9) and section 50 of the Bihar Goods and Services Tax Act, 2017 (hereinafter referred to as the Act-2017 for short); b) For issuance of a writ in the nature of 2/7 certiorari for quashing of the order dated 27.02.2021 contained in Annexure-8 passed in Appeal Case No. M.G.G.S.T. : 29/20-21 by Additional Commissioner of State Tax Bhagalpur, for the period of 1.4.2018 to 31.03.20219 (2018-2019) dismissing the appeal against the order dated 21.3.2020 as no proper opportunity of hearing was granted to the petitioner thereby violating the principles of natural justice. c) For issuance of a writ or order or direction on respondents especially respondent No. 3 to award an opportunity of filing the comprehensive reply and also of hearing in the proceeding initiated under Section 74 of the act and decide the matter afresh after considering all materials and explanation submitted by the petitioner. d) For holding and declaration that the action of the respondent assessing authority is violation of principle of natural justice no responding and communicating to the petitioner anything about the result of reply dated 18.2.2020 submitted by the petitioner in form of GST ASMT-11 with reference No. -ZA100220000277L along with bill contained in Annexure-2 series in pursuance of GST ASMT-10 dated 2/2/2020 contained in Annexure-1 and as well as passing of the aforesaid impugned order along with the demand notice dated 21.03.2020 having reference no. ZA100320020552l passed by Assistant Commissioner of State Tax without fixing a date of hearing and decision is denial of rights to adequate opportunity of hearing and therefore violates the principles of natural justice; e) For holding and a declaration that the action of the respondent assessing authority is not responding 3/7 and communicating to the petitioner and without issuing the form DRC-06 and passing of the aforesaid impugned order along with demand notice without fixing a date of hearing and decision is denial of rights to adequate opportunity of hearing and therefore violates the principles of natural justice. f) For further holding and a declaration that in the undisputed facts and circumstances of this case the petitioner is entitled to an opportunity of submitting its case and also of hearing on the issues of facts and law before any fresh decision is taken by the respondent assessing authority in terms of the provisions of the act; g) To quash the order of attached bank account of the petitioner’s establishment issued to the bank authority contained in Annexure-5 by the respondent No. -3 and the authority may be directed to release immediately as the same is greatly hindering the ongoing business; h) For grant of any other relief or reliefs to which the petitioner is found entitled in the facts and circumstances of this case.”
It is brought to our notice that vide impugned order dated 27.02.2021 (Annexure-8) passed by the Additional Commissioner of State Tax, Bhagalpur in Appeal Case No. M.G.G.S.T-29/20-21, the appeal of the petitioner against the order dated 21.03.2020 passed by the Assistant Commissioner of State Taxes, Munger in GSTIN/ID:10AJKPS4518A1ZO (Reference No. ZA100320020552L), has been rejected merely 4/7 on the grounds of being barred by limitation. Both the orders were ex parte in nature. In our considered view, the delay stands sufficiently explained on account of COVID restrictions. Learned counsel for the Revenue, states that he has no objection if the matter is remanded to the Appellate Authority for deciding the appeal afresh. Also, while considering and deciding the appeal, the ground of delay shall not be taken into account and the appeal shall be decided on merits. Also, during pendency of the appeal, no coercive steps shall be taken against the petitioner. Statement accepted and taken on record. Having heard learned counsel for the parties as also perused the record made available, we dispose of the present petition in the following mutually agreeable terms:- (a) We quash and set aside the impugned order dated 27.02.2021 (Annexure-8) passed by the Additional Commissioner of State Tax, Bhagalpur in Appeal Case No. MGGST-29/20-21. (b) We accept the statement of the petitioner that ten per cent of the total amount, being condition prerequisite for hearing of the appeal, already stands deposited. If that were so, 5/7
the appeal shall be decided on merits. However, if the amount is not deposited for whatever reason(s), same shall be done before the next date; (c) This deposit shall be without prejudice to the respective rights and contention of the parties and subject to the order passed by the Appellate Authority. However, if it is ultimately found that the petitioner’s deposit is in excess, the same shall be refunded within two months from the date of passing of the order; (d) We also direct for de-freezing/de-attaching of the bank account(s) of the writ-petitioner, if attached in reference to the proceedings, subject matter of present petition. This shall be done immediately. (e) Petitioner undertakes to appear before the Appellate Authority i.e. Additional Commissioner of State Tax (Appeal), Bhagalpur Division, Bhagalpur on 18th of August, 2021 at 10:30 A.M., if possible through digital mode; (f) The Appellate Authority shall condone the delay in filing the appeal and decide the appeal on merits after complying with the principles of natural justice; (g) Opportunity of hearing shall be afforded to the parties to place on record all essential documents and materials, 6/7 if so required and desired; (h) During pendency of the appeal, no coercive steps shall be taken against the petitioner. (i) The Appellate Authority shall pass a fresh order only after affording adequate opportunity to all concerned, including the writ petitioner; (j) Petitioner through learned counsel undertakes to fully cooperate in such proceedings and not take unnecessary adjournment; (k) The Appellate Authority shall decide the appeal on merits expeditiously, preferably within a period of two months from the date of appearance of the petitioner; (l) The Appellate Authority shall pass a speaking order assigning reasons, copy whereof shall be supplied to the parties; (m) Liberty reserved to the petitioner to challenge the order, if required and desired; (n) Equally, liberty reserved to the parties to take recourse to such other remedies as are otherwise available in accordance with law; (o) We are hopeful that as and when petitioner takes recourse to such remedies, before the appropriate forum, the 7/7 same shall be dealt with, in accordance with law, with a reasonable dispatch; (p) We have not expressed any opinion on merits and all issues are left open; (q) If possible, proceedings during the time of current Pandemic [Covid-19] be conducted through digital mode; The instant petition sands disposed of in the aforesaid terms. Interlocutory Application(s), if any, also stands disposed of. Learned counsel for the respondents undertakes to communicate the order to the appropriate authority through electronic mode.
Sujit/PKP (Sanjay Karol, CJ) ( S. Kumar, J) AFR/NAFR CAV DATE Uploading Date 16.07.2021 Transmission Date
Reproduced from the public record of the Patna High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.