Amrita Trading Company vs. The State Of Bihar

Facts

The petitioner, M/s Manikant Singh, a partnership firm, challenged an appellate order dated February 13, 2021, passed by the Additional Commissioner of State Taxes (Appeal), Purnea Division. This order rejected the petitioner's appeal against an order dated May 12, 2020 (rectified from February 11, 2020), and a summary of order in Form GST DRC-08 dated July 1, 2020, passed by the Joint Commissioner of State Taxes, Purnea Circle. The original orders imposed tax and interest liability for the period October 2018 to March 2019, under Section 73 of the Bihar Goods And Services Tax Act, 2017. The appeal was rejected solely on the grounds of limitation. The petitioner argued that the delay was due to COVID-19 restrictions and that the original orders were ex parte and lacked sufficient reasoning.

Held

The Court quashed and set aside the impugned appellate order dated February 13, 2021, and the original orders dated February 11, 2020 (rectified to May 12, 2020) and July 1, 2020. The Court found that the appellate order rejecting the appeal on limitation grounds was unsustainable, especially considering the COVID-19 restrictions which sufficiently explained the delay. More importantly, the Court held that the original orders were passed in violation of the principles of natural justice, as the petitioner was not afforded a fair opportunity of hearing and the orders were ex parte without sufficient reasoning to determine the amount due. The Court noted that such orders entail civil consequences. The matter was remanded to the Assessing Authority for a fresh decision on merits after complying with the principles of natural justice, with specific directions for deposits, de-freezing of bank accounts, and expeditious disposal within two months. The Court explicitly stated that it had not expressed any opinion on the merits of the case.

Key Issues

1. Whether the appellate order dated February 13, 2021, rejecting the petitioner's appeal on grounds of limitation, is sustainable in light of the COVID-19 pandemic and the principles of natural justice? (Question of law and mixed fact and law, concerning Section 107 of the Bihar Goods And Services Tax Act, 2017). Petitioner's arguments: The petitioner contended that the appellate order was highly cryptic, non-speaking, and in violation of Section 107 of the Bihar Act, 2017. They argued that the delay in filing the appeal was sufficiently explained by COVID-19 restrictions. Furthermore, the original orders passed by the Joint Commissioner were ex parte and lacked proper reasoning, violating the principles of natural justice. Revenue's arguments: The Revenue, through the learned counsel for the State, stated that they had no objection if the matter was remanded to the Assessing Authority for a fresh decision on merits. They also agreed that no coercive steps would be taken against the petitioner during the pendency of the case.