M/S K.R. Steel Traders vs. The State Of Bihar

Facts

The petitioner, M/s K.R. Steel Traders, filed a writ petition challenging an appellate order dated December 16, 2020, passed by the Additional Commissioner of State Taxes (Appeal), Patna West Division. This order rejected the petitioner's appeal against an order dated August 16, 2019, passed by the Joint Commissioner of State Taxes, Patna South Circle, and a summary of order dated August 29, 2019. The appeal was rejected solely on the grounds of being barred by limitation. Both the original order and the summary of order were ex parte. The petitioner sought to quash these orders and have their appeal declared within limitation, arguing that the delay was attributable to COVID-19 restrictions and that the Limitation Act, 1963, should apply.

Held

The Court quashed and set aside the appellate order dated December 16, 2020, the original order dated August 16, 2019, and the summary of order dated August 29, 2019. The Court found that the delay in filing the appeal was sufficiently explained due to COVID-19 restrictions. Furthermore, the Court held that the original orders were bad in law due to a violation of the principles of natural justice, as the petitioner was not afforded a fair opportunity of hearing, and the ex parte orders did not provide sufficient reasoning for determining the amount due. The Court accepted the petitioner's undertaking to deposit 10% of the total amount (if not already deposited) and an additional 10% of the demand within four weeks, without prejudice to the rights of the parties. The Court also directed the de-freezing of the petitioner's bank accounts. The matter was remanded to the Assessing Authority 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. 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 appellate order dated December 16, 2020, rejecting the petitioner's appeal on grounds of limitation, is sustainable in light of the COVID-19 pandemic and relevant judicial pronouncements extending limitation periods? 2. Whether the original order dated August 16, 2019, and the summary of order dated August 29, 2019, passed ex parte by the revenue authorities, are liable to be quashed for violation of principles of natural justice and lack of sufficient reasoning? Petitioner's arguments: The petitioner contended that the delay in filing the appeal was sufficiently explained due to COVID-19 restrictions, citing orders from the Patna High Court Full Bench in C.W.J.C. No. 5633 of 2020 and the Supreme Court in Writ Petition (Civil) No. 3 of 2020. They further argued that the Limitation Act, 1963, should apply to GST proceedings, specifically Section 5, allowing for condonation of delay, in view of Section 29(2) of the Limitation Act. The petitioner also argued that the original orders were passed ex parte without affording a fair opportunity of hearing and lacked sufficient reasoning. Revenue's arguments: The Revenue stated they had no objection if the matter was remanded to the Assessing Authority for a fresh decision on merits.