M/S Chanda Yadav vs. The State Of Bihar

Facts

The petitioner, M/s Chanda Yadav Matadi, filed a writ petition challenging orders dated February 25, 2021, and October 4, 2021, passed by the Additional Commissioner of State Tax (Appeals), Bhagalpur. These orders rejected the petitioner's appeal against an order dated March 3, 2020, passed by the Joint Commissioner of State Taxes, Munger Circle, for the tax period of June 2019. The appeals were rejected solely on the grounds of being barred by limitation. The impugned orders were ex parte. The petitioner contended that the delay in filing the appeal was sufficiently explained by COVID-19 restrictions. 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 orders were bad in law on two grounds: (a) violation of the principles of natural justice, specifically the lack of a fair opportunity of hearing and insufficient time afforded to the petitioner to represent their case; and (b) the ex parte nature of the orders, which did not provide sufficient reasons for determining the amount due. The Court quashed and set aside the impugned orders passed by the Additional Commissioner of State Tax (Appeals) and the order passed by the Joint Commissioner of State Taxes. The Court directed the petitioner to deposit ten percent of the demand raised by the Assessing Officer within four weeks, without prejudice to the rights of the parties. The Court also ordered the de-freezing of the petitioner's bank accounts and directed the Assessing Authority to decide the case on merits after complying with the principles of natural justice, affording adequate opportunity to all concerned, and passing a speaking order expeditiously, preferably within two months. 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 the merits of the case and all issues were left open.

Key Issues

1. Whether the impugned orders passed by the Additional Commissioner of State Tax (Appeals) are bad in law due to violation of the principles of natural justice, specifically the lack of a fair opportunity of hearing and the ex parte nature of the orders without sufficient reasoning, as contemplated under the relevant provisions of the GST Act and Rules. Petitioner's Arguments: The petitioner argued that the orders were ex parte and passed without affording sufficient time for representation, violating principles of natural justice. The delay in filing the appeal was attributable to COVID-19 restrictions, which should have been considered. The orders lacked sufficient reasoning to determine the amount due. 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, with no coercive steps to be taken against the petitioner during the pendency of the case.