Luqueman Ali Siddiqui vs. The State Of Bihar

Facts

The petitioner, Luqueman Ali Siddiqui, filed a writ petition challenging an order dated March 2, 2021, passed by the Additional Commissioner of State Taxes (Appeal), Saran Circle, Chapra. This appellate order had rejected the petitioner's appeal against an order dated February 24, 2020, and a consequential demand notice dated February 29, 2020, issued by the Assistant Commissioner of State Tax, Saran Circle, Chapra. The appeal was rejected solely on the grounds of being 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 to be taken against the petitioner during the pendency of the case.

Held

The Court quashed and set aside the impugned order dated March 2, 2021, passed by the Additional Commissioner of State Taxes (Appeal), Saran Circle, Chapra, as well as the order dated February 24, 2020, and the consequential demand notice dated February 29, 2020, issued by the Assistant Commissioner of State Tax, Saran Circle, Chapra. The Court found the appellate order to be bad in law for two primary reasons: (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 present their case, and (b) the order being passed ex parte without sufficient reasons decipherable from the record to justify the determined amount. The Court noted that such orders, entailing civil consequences, could be interfered with by the High Court notwithstanding statutory remedies. The Court directed the de-freezing/de-attaching of the petitioner's bank account(s) immediately. The petitioner was directed to deposit ten percent of the total amount (if not already deposited) before the next date and additionally deposit another ten percent of the demand within four weeks, without prejudice to their rights. 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 merits and all issues were left open.

Key Issues

1. Whether the appellate order dated March 2, 2021, rejecting the petitioner's appeal on grounds of limitation, is sustainable in light of the COVID-19 restrictions impacting the petitioner's ability to file within the prescribed period, as per principles of natural justice? 2. Whether the original order dated February 24, 2020, and the consequential demand notice dated February 29, 2020, were passed in violation of the principles of natural justice, specifically concerning the opportunity of hearing and the sufficiency of reasons provided for determining the demand? Petitioner's Arguments: The petitioner argued that the delay in filing the appeal was adequately explained by the prevailing COVID-19 restrictions. Furthermore, the petitioner contended that the original order and demand notice were passed ex parte, without affording a fair opportunity of hearing and without sufficient reasons to determine the amount due. This violation of natural justice principles rendered the orders bad in law. 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. The Revenue also agreed that no coercive steps should be taken against the petitioner during the pendency of the case.