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 Tax (Appeals). This order rejected the petitioner's appeal against a prior order dated 31.01.2020 by the Joint Commissioner of State Taxes. The appeal was rejected solely on the ground of being barred by limitation. Both the prior orders were ex parte. The petitioner contended that the delay in filing the appeal was sufficiently explained by COVID-19 restrictions. The Revenue stated it had no objection to the matter being remanded for fresh decision on merits, with no coercive steps during pendency.

Held

The Court quashed and set aside the impugned order dated 27.02.2021 by the Additional Commissioner of State Tax (Appeals), the order dated 31.01.2020 by the Joint Commissioner of State Taxes, and the Summary of Order dated 02.02.2020. The Court found that the ex parte nature of the orders and the lack of sufficient reasoning violated the principles of natural justice. The Court accepted the petitioner's statement that 10% of the total amount had been deposited as a prerequisite for hearing the appeal, and if not, it was to be deposited. Additionally, the petitioner undertook to deposit another 10% of the demand within four weeks, without prejudice to their rights. The Court directed the de-freezing of the petitioner's bank accounts. The Assessing Authority was directed to decide the case on merits after complying with 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 Additional Commissioner of State Tax (Appeals) erred in rejecting the petitioner's appeal solely on the grounds of limitation, considering the prevailing COVID-19 restrictions, thereby violating the principles of natural justice? 2. Whether the ex parte orders passed by the Joint Commissioner and the subsequent appellate order lacked sufficient reasoning and violated the principles of natural justice, warranting interference by the High Court? Petitioner's Arguments: The petitioner argued that the delay in filing the appeal was adequately explained due to COVID-19 restrictions. They also contended that the ex parte orders were passed without sufficient opportunity for hearing and lacked proper reasoning, leading to civil consequences. 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. It also agreed that no coercive steps should be taken against the petitioner during the pendency of the case.