M/S Sai Nexgen Compucons PVT. LTD. vs. The State Of Bihar

Held

The Court held that the delay in filing the appeal was sufficiently explained due to COVID-19 restrictions. Furthermore, the Court found that the ex parte orders violated the principles of natural justice, specifically the right to a fair opportunity of hearing, as the petitioner was not afforded sufficient time to present their case. The Court also noted that the ex parte orders lacked sufficient reasoning to decipher how the tax amount was determined. Consequently, the Court quashed and set aside the impugned order dated June 17, 2020, the order dated July 6, 2019, and the Summary of Order dated August 20, 2019. The Court directed the petitioner to deposit ten percent of the total demand (if not already deposited) and an additional ten percent of the demand within four weeks, without prejudice to their rights. The bank accounts of the petitioner were to be de-frozen. 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 preferably within two months from the petitioner's appearance. No coercive steps were to be taken against the petitioner during the pendency of the proceedings. The Court explicitly stated that no opinion was expressed on the merits of the case and all issues were left open.

Facts

The petitioner filed a writ petition challenging an order dated June 17, 2020, passed by the Additional Commissioner, Commercial Taxes (Appeal), Patna, which rejected the petitioner's appeal against an order dated July 6, 2019, passed by the Assistant Commissioner of Commercial Tax, Patna. The appeal was rejected solely on the grounds of being barred by limitation. Both the original order and the summary of order were ex parte. The petitioner argued that the delay in filing the appeal was sufficiently explained due to COVID-19 restrictions. The revenue stated it had no objection if the matter was remanded for fresh decision on merits, with no coercive steps during pendency.

Key Issues

1. Whether the appeal filed by the petitioner was barred by limitation, considering the COVID-19 restrictions, and if the delay was sufficiently explained (turning on the interpretation of limitation provisions in light of pandemic-related disruptions). 2. Whether the impugned orders, passed ex parte, violated the principles of natural justice by not affording a fair opportunity of hearing and by lacking sufficient reasoning for the determined tax liability. Petitioner's Arguments: The petitioner contended that the delay in filing the appeal was due to COVID-19 restrictions and was sufficiently explained. They also argued that the ex parte orders violated principles of natural justice as no sufficient time was given for representation and the orders lacked discernible reasoning for the tax demand. 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.