Maa Kali Traders vs. State Of Bihar

Facts

The petitioner challenged an order dated February 25, 2021, passed by the Additional Commissioner of State Tax (Appeal), Bhagalpur Division, which rejected their appeal against an order dated February 9, 2020, passed by the Joint Commissioner of State Tax, Munger Circle. The appeal was rejected solely on the grounds of being barred by limitation. The orders under challenge were ex parte. The petitioner had prayed for various reliefs, including quashing of the impugned orders and a direction for fresh adjudication. The High Court had previously disposed of the petition on July 7, 2021, with a direction for the petitioner to appear before the Assessing Authority. However, this order was inadvertently typed with a direction to appear before the Appellate Authority, necessitating modification.

Held

The Court held that the delay in filing the appeal was sufficiently explained due to COVID-19 restrictions. Furthermore, the Court found the impugned orders 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 and insufficient time afforded to the petitioner to represent their case, and (b) the ex parte nature of the orders, which did not provide sufficient reasons for determining the amount due. Consequently, the Court quashed and set aside the impugned order dated February 25, 2021, and the earlier orders dated February 9, 2020. The Court directed the petitioner to deposit 10% of the total demand (in addition to any amount already deposited) within four weeks, without prejudice to their rights. The bank account(s) of the petitioner were to be de-frozen. The petitioner was directed to appear before the Assessing Authority on October 11, 2021, who was then 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. 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, and all issues were left open.

Key Issues

1. Whether the appeal filed by the petitioner before the Additional Commissioner of State Tax (Appeal) was barred by limitation, considering the COVID-19 restrictions, and if so, whether the delay was sufficiently explained? Petitioner's contention: The delay in filing the appeal was sufficiently explained due to COVID-19 restrictions, and the ex parte orders passed by the authorities violated the principles of natural justice by not affording a fair opportunity of hearing and lacking sufficient reasoning. Revenue's contention: The Revenue stated it had no objection if the matter was remanded to the Assessing Authority for deciding the case afresh on merits, with no coercive steps to be taken against the petitioner during the pendency of the case. The Revenue did not contest the petitioner's arguments regarding limitation or natural justice but agreed to a remand.