M/S Ajay Kumar Singh vs. The State Of Bihar

Facts

The petitioner, M/s Ajay Kumar Singh, a proprietorship firm, filed a writ petition challenging an order dated December 18, 2021, passed by the Additional Commissioner of State Tax (Appeal). This order rejected the petitioner's appeal against an order dated January 17, 2021, passed by the Joint Commissioner of State Tax. The Joint Commissioner's order, along with a summary order, was also challenged. The petitioner contended that the appellate order was passed in violation of principles of natural justice, as insufficient time was provided for representation, and the order was ex parte without sufficient reasoning. The Revenue stated it had no objection if the matter was remanded to the Assessing Authority for fresh decision on merits, with no coercive steps during pendency.

Held

The Court held that the appellate 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 found that the authorities had not adjudicated the matter on the attending facts and circumstances, and all issues of fact and law ought to have been dealt with. Consequently, the Court quashed and set aside the impugned orders dated December 18, 2021, January 17, 2021, and February 25, 2022. The Court directed the petitioner to deposit ten percent of the total amount (if not already deposited) and an additional ten percent of the demand within four weeks. The bank account(s) of the petitioner were to be de-frozen immediately. The Assessing Authority was directed to decide the case on merits after complying with the principles of natural justice, affording opportunity to parties, and passing a speaking order within two months from the petitioner's appearance. No coercive steps were to be taken against the petitioner during this period. The Court explicitly stated that it had not expressed any opinion on merits and all issues were left open.

Key Issues

1. Whether the appellate order dated December 18, 2021, passed by the Additional Commissioner of State Tax (Appeal) is bad in law due to violation of the principles of natural justice, specifically the right to a fair opportunity of hearing, as argued by the petitioner? 2. Whether the ex parte order passed by the appellate authority, which allegedly lacks sufficient reasoning for determining the amount due, is liable to be set aside, as contended by the petitioner? 3. Whether the matter should be remanded to the Assessing Authority for a fresh decision on merits, as suggested by the Revenue and agreed to by the petitioner? Petitioner's Arguments: The petitioner argued that the appellate order was passed in violation of natural justice principles, as they were not afforded sufficient time to present their case. They also contended that the ex parte order lacked adequate reasoning to justify the demand. Revenue's Arguments: The Revenue stated it had no objection to the matter being remanded to the Assessing Authority for a fresh decision on merits, subject to certain conditions, and agreed that no coercive steps should be taken against the petitioner during the pendency of the case.