M/S S.R. Brothers vs. Commissioner Of State Tax

Held

The High Court quashed and set aside the impugned order dated March 3, 2020, passed by the Additional Commissioner of State Tax (Appeal). The Court accepted the statement that ten percent of the total disputed amount, a prerequisite for the hearing of the appeal, had been deposited. If not deposited, it was to be done before the next date. This deposit was to be without prejudice to the rights and contentions of the parties and subject to the final order of the Appellate Authority, with a refund mechanism for excess deposits. The Court directed the de-freezing of the petitioner's bank accounts. The Appellate Authority was directed to condone the delay in filing the appeal, decide the appeal on merits after complying with the principles of natural justice, and afford adequate opportunity to all parties. Coercive steps against the petitioner were prohibited during the pendency of the appeal. The Appellate Authority was to pass a speaking order expeditiously, preferably within two months from the petitioner's appearance. The Court explicitly stated that it had not expressed any opinion on the merits of the case, leaving all issues open.

Facts

The petitioner filed a writ petition before the Patna High Court challenging an order dated March 3, 2020, passed by the Additional Commissioner of State Tax (Appeal), Magadh Division, Gaya. This appellate order rejected the petitioner's appeal against an order dated October 1, 2018, passed by the Joint Commissioner of State Tax, Investigation Bureau, Bihar, Patna. The appeal was rejected solely on the grounds of being barred by limitation. The original order by the Joint Commissioner was passed under Sections 122(1), 50, 73(11), and 35(2) of the Bihar Goods and Services Tax Act, 2017, for the period 2018-19. The petitioner contended that the delay in filing the appeal was sufficiently explained due to COVID-19 restrictions.

Key Issues

1. Whether the delay in filing the appeal before the Appellate Authority was sufficiently explained due to COVID-19 restrictions, and if so, whether the Appellate Authority erred in rejecting the appeal on grounds of limitation, thereby violating principles of natural justice? (Mixed question of law and fact, concerning the interpretation and application of principles of condonation of delay in light of extraordinary circumstances and the provisions of the Bihar Goods and Services Tax Act, 2017). Petitioner's Contentions: The petitioner argued that the delay in filing the appeal was adequately explained due to the prevailing COVID-19 restrictions, which hindered timely filing. They contended that the Appellate Authority's rejection of the appeal solely on limitation grounds, without considering the circumstances, was unjust and contrary to principles of natural justice. Revenue's Contentions: The learned counsel for the Revenue stated that they had no objection if the matter was remanded to the Appellate Authority for a fresh decision on merits, with the condition that the ground of delay would not be taken into account. They also agreed that no coercive steps should be taken against the petitioner during the pendency of the appeal.