M/S Sonali Construction vs. The State Of Bihar

Facts

The petitioner, M/s Sonali Construction, approached the Patna High Court challenging an order dated 09.09.2021 passed by the Additional Commissioner of State Tax (Appeals), Bhagalpur Division, which rejected their appeal on grounds of delay and non-submission of a certified copy of the order. The petitioner also challenged an earlier order dated 03.01.2020 passed by the Joint Commissioner of State Tax, Bhagalpur. The revenue, through its counsel, agreed to a remand of the matter to the Appellate Authority for a fresh decision on merits, without considering the delay, and undertook not to take coercive steps against the petitioner during the pendency of the appeal.

Held

The Court quashed and set aside the impugned order dated 09.09.2021 passed by the Additional Commissioner of State Tax (Appeals) and the subsequent order in Form GST APL-02 dated 10.09.2021. The appeal was restored to its original file and number. The Court accepted the petitioner's statement that ten percent of the total amount, a prerequisite for hearing the appeal, had been deposited, and directed that if not deposited, it should 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. The Court also directed the de-freezing/de-attaching of the petitioner's bank accounts. The Appellate Authority was directed to condone the delay, decide the appeal on merits after complying with the principles of natural justice, afford adequate opportunity to all parties, and pass a speaking order. No coercive steps were to be taken against the petitioner during the pendency of the appeal, which was to be decided expeditiously, preferably within two months. The Court explicitly stated that no opinion was expressed on the merits of the case, and all issues were left open.

Key Issues

1. Whether the Appellate Authority erred in rejecting the petitioner's appeal solely on the grounds of delay and non-submission of the certified copy of the order, thereby violating principles of natural justice? (Mixed question of law and fact, concerning procedural fairness and statutory timelines). Petitioner's Contention: The petitioner argued that the rejection of their appeal on procedural grounds, without considering the merits, was unjust. They sought a fresh hearing on the substantive issues. Revenue's Contention: The Revenue did not contest the petitioner's plea for a remand and agreed to have the appeal decided on merits, waiving the ground of delay. They had no objection to the matter being remanded to the Appellate Authority.