M/S Saroj Kumar vs. The State Of Bihar

Facts

The petitioner, M/s Saroj Kumar, a proprietorship firm, filed a writ petition challenging an order dated 27.02.2021 passed by the Additional Commissioner of State Taxes (Appeals). This order had rejected the petitioner's appeal against an order dated 02.02.2020 passed by the Joint Commissioner of State Taxes. The appeal was rejected solely on the ground of delay. 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 taken against the petitioner during the pendency of the case. The Court noted that the order under challenge was ex parte and lacked sufficient reasoning.

Held

The Court quashed and set aside the impugned order dated 27.02.2021 passed by the Additional Commissioner of State Taxes (Appeals) and the order dated 02.02.2020 passed by the Joint Commissioner of State Taxes. The Court found the order of the appellate authority to be bad in law, primarily on two grounds: violation of the principles of natural justice, as the petitioner was not afforded sufficient time to represent their case, and the ex parte nature of the order which did not provide sufficient reasoning for determining the amount due. The Court accepted the petitioner's statement that 10% of the total amount, a prerequisite for hearing the appeal, had been deposited. If not, it was to be deposited before the next date. The petitioner was also directed to additionally deposit 10% of the demand within four weeks, without prejudice to the rights of the parties. The bank accounts of the petitioner were to be de-frozen immediately. The Assessing Authority was directed to decide the case on merits after complying with the principles of natural justice, affording adequate opportunity to all concerned, and passing a speaking order within two months from 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 appeal filed by the petitioner before the Additional Commissioner of State Taxes (Appeals) was liable to be rejected solely on the ground of delay, considering the prevailing COVID-19 restrictions? (Question of law) 2. Whether the order passed by the Joint Commissioner of State Taxes was bad in law due to violation of the principles of natural justice, specifically the lack of a fair opportunity of hearing and insufficient reasoning for determining the amount due? Petitioner's arguments: The petitioner argued that the delay in filing the appeal was sufficiently explained by the COVID-19 restrictions. Furthermore, the original order passed by the Joint Commissioner was ex parte and lacked adequate reasons, thus violating principles of natural justice. Revenue's arguments: The Revenue stated it had no objection to the matter being remanded to the Assessing Authority for a decision on merits, provided no coercive steps were taken against the petitioner during the pendency of the case.