M/S Amba Tirupati Zetetic Engineering Private Limited vs. The Union Of INDIA

Facts

The petitioner, M/s Amba Tirupati Zetetic Engineering Private Limited, challenged an order dated February 5, 2021, passed by the Additional Commissioner of State Taxes (Appeals), Patna. This appellate order had rejected the petitioner's appeal against an order dated March 13, 2020, passed by the Assistant Commissioner of State Taxes, Patliputra Circle, Patna. The sole ground for rejection by the appellate authority was that the appeal was barred by limitation. The petitioner contended that the delay was sufficiently explained due to COVID-19 restrictions. The Revenue stated it had no objection if the matter was remanded to the Assessing Authority for a fresh decision on merits, with no coercive steps during the pendency of the case. The High Court noted that the appellate order was passed ex parte and lacked sufficient reasoning, violating principles of natural justice.

Held

The Court held that the delay in filing the appeal was sufficiently explained due to COVID-19 restrictions. Furthermore, the Court found the appellate order to be bad in law on two grounds: (a) violation of the principles of natural justice, specifically the lack of a fair opportunity of hearing for the petitioner, and (b) the ex parte nature of the order, which did not provide sufficient reasoning for determining the amount due. Consequently, the Court quashed and set aside both the appellate order dated February 5, 2021, and the original order dated March 13, 2020. The Court directed the petitioner to deposit ten percent of the total amount demanded (if not already deposited) and an additional ten percent of the demand raised before the Assessing Officer within four weeks, without prejudice to the rights of the parties. The Court also ordered the de-freezing of the petitioner's bank accounts. 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 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 (Appeals) was sufficiently explained due to COVID-19 restrictions, and if the appeal ought to have been considered on merits? 2. Whether the appellate order, which rejected the appeal solely on the grounds of limitation without considering the merits, was bad in law and violative of the principles of natural justice? Petitioner's Arguments: The petitioner argued that the delay in filing the appeal was attributable to the COVID-19 pandemic and its associated restrictions, and therefore, the appellate authority should have condoned the delay and decided the appeal on merits. The petitioner also contended that the appellate order was passed ex parte and lacked sufficient reasoning, thus violating the principles of natural justice. Revenue's Arguments: The Revenue stated that it had no objection to the matter being remanded to the Assessing Authority for a fresh decision on merits. The Revenue did not contest the petitioner's claim regarding the delay being due to COVID-19 restrictions.