M/S Shree Madhav Hardware vs. The State Of Bihar

Facts

The petitioner, M/s Shree Madhav Hardware, filed a writ petition challenging an order dated December 21, 2020, passed by the Additional Commissioner of State Taxes (Appeal), Purnea Division. This appellate order had rejected the petitioner's appeal against an order dated March 20, 2020, passed by the Deputy Commissioner of State Taxes, Purnea Circle. The appeal was rejected solely on grounds of non-filing of a certified copy and limitation. Both the original order and the summary of order in Form GST DRC-07 were ex parte. The petitioner contended that the delay in filing the appeal was due to COVID-19 restrictions. The Revenue stated it had no objection to the matter being remanded for fresh decision on merits.

Held

The Court held that the delay in filing the appeal was sufficiently explained by the COVID-19 restrictions. Furthermore, the Court found that the ex parte order passed by the appellate authority violated the principles of natural justice, as the petitioner was not afforded a fair opportunity of hearing and the order lacked sufficient reasoning. Consequently, the Court quashed and set aside the impugned appellate order dated December 21, 2020, and the original order dated March 20, 2020. The Court directed the petitioner to deposit an additional ten percent of the demand raised by the Assessing Officer within four weeks, without prejudice to the rights of the parties. The bank accounts of the petitioner were ordered 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 adequate opportunity to all 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 the pendency of the proceedings. The Court explicitly stated that it had not expressed any opinion on the merits of the case, leaving all issues open.

Key Issues

1. Whether the delay in filing the appeal before the Additional Commissioner of State Taxes (Appeal) was sufficiently explained due to COVID-19 restrictions, thereby warranting condonation of delay? The petitioner argued that the delay was attributable to the prevailing COVID-19 restrictions, which prevented timely filing. The Revenue did not contest this point, agreeing to a remand. 2. Whether the appellate order, which rejected the appeal ex parte, violated the principles of natural justice by not affording a fair opportunity of hearing and by failing to provide sufficient reasons for determining the amount due? The petitioner contended that the original order was passed ex parte without sufficient opportunity to present their case and lacked adequate reasoning. The Revenue agreed to a remand for a decision on merits.