Sharda Chandel Contract Private Limited vs. The State Of Bihar Through Principal Secretary - Cum- Commissioner Department Of State Taxes

Facts

The petitioner, Sharda Chandel Contract Private Limited, challenged an order dated October 27, 2020, passed by the Additional Commissioner of State Taxes (Appeal). This order rejected the petitioner's appeal against an order dated January 15, 2020, passed by the Joint Commissioner of State Tax, for the tax period April 2019-September 2019. The appeal was rejected solely for non-submission of a certified copy of the order. The petitioner argued that the original order was passed ex parte and without sufficient reasons, violating principles of natural justice. The Revenue stated it had no objection if the matter was remanded for fresh decision on merits, with no coercive steps during pendency.

Held

The Court held that the impugned appellate order dated October 27, 2020, and the original order dated January 15, 2020, were bad in law. The Court found that the original order was passed ex parte in violation of the principles of natural justice, as the petitioner was not afforded a fair opportunity of hearing and sufficient time to represent their case. Furthermore, the order lacked sufficient reasoning to determine the amount due. Consequently, the Court quashed and set aside both the appellate and original orders. The Court directed the petitioner to deposit an additional 10% of the demand within four weeks, without prejudice to their rights. Bank accounts 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 during this period. 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 October 27, 2020, rejecting the petitioner's appeal on the ground of non-submission of a certified copy of the order, is bad in law, particularly in light of alleged violations of the principles of natural justice and the ex parte nature of the original order under Section 74 of the Act. Petitioner's Arguments: The petitioner contended that the original order passed by the Joint Commissioner was ex parte and lacked sufficient reasoning, violating the principles of natural justice. They argued that the appellate authority's rejection of the appeal on a procedural technicality, without considering the merits of the case, was unsustainable. The petitioner also stated that 10% of the disputed amount had been deposited as a prerequisite for the appeal hearing. Revenue's Arguments: The Revenue did not object to the matter being remanded to the Assessing Authority for a fresh decision on merits. They agreed that no coercive steps should be taken against the petitioner during the pendency of the case.