M/S Metro Brand LTD vs. The State Of Bihar

Facts

The petitioner, M/s Metro Brand Ltd, filed a writ petition challenging an order dated June 17, 2020, passed by the Additional Commissioner, State Tax (Appeal), Patna, which rejected their appeal against an order dated August 10, 2019, passed by the Assistant Commissioner of State Taxes. The appeal was rejected solely on the grounds of being barred by limitation. The petitioner argued that the delay was sufficiently explained due to COVID-19 restrictions. The revenue stated it had no objection if the matter was remanded to the Assessing Authority for a fresh decision on merits, with no coercive steps taken against the petitioner during the pendency. The High Court noted that the impugned order was ex parte and lacked sufficient reasoning.

Held

The Court quashed and set aside the impugned order dated June 17, 2020, passed by the Additional Commissioner, State Tax (Appeal), and the order dated August 10, 2019, passed by the Assistant Commissioner of State Taxes. The Court found that the order was bad in law due to a violation of the principles of natural justice, specifically the lack of a fair opportunity of hearing and the ex parte nature of the order without sufficient reasoning. The Court accepted the petitioner's statement that 10% of the total amount, a prerequisite for hearing the appeal, had been deposited. The petitioner was directed to deposit an additional 10% of the demand within four weeks, without prejudice to their rights. The bank accounts of the petitioner were to be de-frozen. 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. All issues of fact and law were left open for determination by the Assessing Authority.

Key Issues

1. Whether the appeal filed by the petitioner before the Additional Commissioner, State Tax (Appeal) was barred by limitation, considering the COVID-19 restrictions, and if so, whether the delay was sufficiently explained? (Mixed question of law and fact). The petitioner contended that the delay in filing the appeal was attributable to the COVID-19 pandemic and its associated restrictions, which prevented timely filing. The revenue did not contest this point, agreeing to a remand for fresh adjudication on merits. The Court also considered whether the impugned order violated the principles of natural justice by not affording a fair opportunity of hearing and by being passed ex parte without sufficient reasoning. The petitioner argued that they were not given adequate time to present their case and that the ex parte order lacked proper justification for the determined amount.