Pnc Infratech Limited vs. The State Of Bihar

Facts

The petitioner, PNC Infratech Limited, filed a writ petition challenging an order dated 09.06.2021 passed by the Additional Commissioner of State Taxes (Appeal), Patna, which rejected their appeal against an order dated 13.02.2021 passed by the Deputy Commissioner of State Taxes, Patna. Both the original order and the appellate order were ex parte. The petitioner contended that they were not afforded sufficient time to represent their case and that the orders lacked sufficient reasoning. The Revenue stated it had no objection if the matter was remanded for fresh decision on merits, with no coercive steps taken against the petitioner during pendency.

Held

The Court held that it was not precluded from interfering with the orders despite the existence of a statutory remedy, as the orders appeared ex facie bad in law. The Court found two primary reasons for interference: (a) violation of the principles of natural justice, specifically the lack of a fair opportunity of hearing and insufficient time afforded to the petitioner, and (b) the ex parte nature of the orders which did not provide sufficient reasoning for determining the amount due. Consequently, the Court quashed and set aside the impugned order dated 09.06.2021 passed by the Additional Commissioner of State Taxes (Appeal) and the order dated 13.02.2021 passed by the Deputy Commissioner of State Taxes. The Court directed the petitioner to deposit ten percent of the demand raised before the Assessing Officer 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 against the petitioner during this period. All issues were left open for decision on merits.

Key Issues

1. Whether the ex parte orders passed by the Deputy Commissioner of State Taxes and the Additional Commissioner of State Taxes, in violation of the principles of natural justice, are liable to be quashed and set aside? Petitioner's Contention: The petitioner argued that the orders were bad in law due to the violation of the principles of natural justice, specifically the lack of a fair opportunity of hearing and insufficient time to present their case. They also contended that the ex parte orders lacked sufficient reasoning for determining the amount due. Revenue's Contention: The Revenue did not object to the matter being remanded to the Assessing Authority for a fresh decision on merits, provided no coercive steps were taken against the petitioner during the pendency of the case.