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

Held

The Court quashed and set aside the impugned order dated June 17, 2020, passed by the Additional Commissioner, Commercial Taxes (Appeal), Patna, the order dated July 6, 2019, passed by the Assistant Commissioner of Commercial Tax, Patna, and the Summary of Order dated August 20, 2019. The Court found that the ex parte orders were passed in violation of the principles of natural justice, as the petitioner was not afforded a fair opportunity of hearing and the orders lacked sufficient reasoning. The Court accepted the petitioner's statement that ten percent of the total amount had been deposited as a prerequisite for hearing the appeal, and directed the petitioner to deposit an additional ten percent of the demand raised before the Assessing Officer within four weeks. The Court also directed the de-freezing of the petitioner's bank accounts. 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 fresh order expeditiously, preferably within two months. 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. This order rejected the petitioner's appeal against an order dated July 6, 2019, passed by the Assistant Commissioner of Commercial Tax, Patna, and a Summary of Order dated August 20, 2019. The appeal was rejected solely on the grounds of being barred by limitation. Both the original order and the summary of order were passed ex parte. The petitioner contended that the delay in filing the appeal was sufficiently explained due to COVID-19 restrictions. The revenue stated it had no objection to the matter being remanded for fresh decision on merits, with no coercive steps taken against the petitioner during pendency.

Key Issues

1. Whether the delay in filing the appeal before the Additional Commissioner, Commercial Taxes (Appeal), Patna, was sufficiently explained due to COVID-19 restrictions, thereby warranting condonation under Section 5 of the Limitation Act, 1963, or similar principles applicable to GST proceedings? 2. Whether the ex parte orders passed by the Assistant Commissioner of Commercial Tax and the Summary of Order were in violation of the principles of natural justice, specifically the right to a fair opportunity of hearing and the requirement for sufficient reasoning? Petitioner's Arguments: The petitioner argued that the delay in filing the appeal was attributable to the COVID-19 restrictions, which prevented timely action. They also contended that the ex parte orders were passed without sufficient opportunity for them to present their case and lacked adequate reasoning, thus violating principles of natural justice. Revenue's Arguments: The learned counsel for the Revenue stated no objection to the matter being remanded to the Assessing Authority for a fresh decision on merits, and agreed that no coercive steps should be taken against the petitioner during the pendency of the case.