M/S Smriti Construction vs. The State Of Bihar

Facts

The petitioner, M/s Smriti Construction, filed a writ petition challenging an order dated February 26, 2021, passed by the Additional Commissioner of State Taxes (Appeals), Bhagalpur. This appellate order had rejected the petitioner's appeal against an order dated March 6, 2020, passed by the Assistant Commissioner of State Taxes, Munger. The rejection was solely on the grounds of the appeal being barred by limitation. Both the original order and the appellate order were ex parte. The petitioner contended that the delay in filing the appeal was sufficiently explained 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 due to COVID-19 restrictions. Furthermore, the Court found that the ex parte orders passed by both the Assistant Commissioner and the Additional Commissioner violated the principles of natural justice. Specifically, the petitioner was not afforded a fair opportunity of hearing, and the orders lacked sufficient reasoning to determine the amount due. Consequently, the Court quashed and set aside both the appellate order dated February 26, 2021, and the original order dated March 6, 2020. The Court directed the petitioner to deposit 10% of the demand amount within four weeks, in addition to any amount already deposited as a prerequisite for hearing the appeal. The 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 of the petitioner's appearance. No coercive steps were to be taken against the petitioner during this period. The Court explicitly stated that no opinion was expressed on the merits of the case, and all issues were left open.

Key Issues

1. Whether the delay in filing the appeal before the Additional Commissioner of State Taxes (Appeals) was sufficiently explained due to COVID-19 restrictions, thereby making the appellate order rejecting the appeal on grounds of limitation bad in law? 2. Whether the ex parte orders passed by the Assistant Commissioner and subsequently upheld by the Additional Commissioner 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? Petitioner's Arguments: The petitioner argued that the delay was attributable to COVID-19 restrictions and that the ex parte orders violated principles of natural justice, lacking sufficient reasoning. They relied on the fact that the delay was sufficiently explained. 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.