Ranjit Prasad Sah Proprietor Sunrise Construction vs. The State Of Bihar

Facts

The petitioner, Ranjit Prasad Sah, proprietor of Sunrise Construction, filed a writ petition challenging orders dated March 6, 2021, passed by the Additional Commissioner State Tax, Purnea. These orders rejected his appeals against demand orders dated February 19, 2020, issued by the Assistant Commissioner of State Tax, Saharsa. The appeals were rejected solely on the grounds of limitation. The demand orders were issued ex parte and without providing the petitioner an opportunity for hearing. The petitioner sought quashing of the appellate orders and demand orders, and a direction for re-assessment with proper opportunity. The tax period under challenge was October 1, 2018, to March 31, 2019. The amount in dispute is not explicitly stated but is implied by the demand orders and the conditions for appeal deposit.

Held

The Court held that the writ petition was maintainable despite the existence of statutory remedies, as the orders appeared to be bad in law. Two primary reasons were cited: (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 his case; and (b) the ex parte nature of the orders, which lacked sufficient reasoning for determining the amount due. The Court found that orders passed ex parte in violation of natural justice principles entail civil consequences. Consequently, the Court quashed and set aside the impugned appellate orders dated March 6, 2021, and the demand orders dated February 19, 2020. The Court also directed the petitioner to deposit ten percent of the total demand amount (if not already done) before the next date and an additional ten percent within four weeks, without prejudice to the rights of the parties. Bank accounts of the petitioner were ordered 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. 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, leaving all issues open.

Key Issues

1. Whether the appeals filed by the petitioner against the demand orders were rightly rejected on the grounds of limitation, considering the prevailing COVID-19 restrictions? (Question of law) 2. Whether the demand orders dated February 19, 2020, issued by the Assistant Commissioner of State Tax, Saharsa, are sustainable in law, having been passed ex parte and without affording the petitioner a proper opportunity of hearing? (Question of mixed law and fact) Petitioner's Arguments: The petitioner contended that the appeals were rejected on grounds of limitation which were not sustainable. The demand orders were issued without providing an opportunity for hearing, violating principles of natural justice, and were therefore not sustainable. The petitioner sought quashing of these orders and a direction for re-assessment. Revenue's Arguments: The learned counsel for the Revenue stated they had no objection if the matter was remanded to the Assessing Authority for deciding the case afresh on merits. They also agreed that no coercive steps would be taken against the petitioner during the pendency of the case.