M/S Parvinder Singh vs. The State Of Bihar

Held

The Court allowed the writ application and set aside the impugned orders. The Court found that the admitted position, as stated in paragraph 22 of the counter affidavit filed by the respondents, was that the petitioner had indeed filed the return on December 7, 2020 (Annexure 'P/4'). The Court noted that the proceedings initiated against the petitioner under Sections 73 and 74 of the CGST/BGST Act, 2017, were a direct consequence of the petitioner's failure to communicate the filing of the return to the respondent authority. Based on the respondents' own admission that no further proceedings would have been initiated had this communication occurred, the Court concluded that the assessment and appellate orders were erroneously passed. The ratio decidendi is that a taxpayer's failure to formally communicate a filed return, when the return itself is demonstrably filed and verifiable on the portal, should not automatically lead to proceedings under Section 74, especially when the revenue admits that such communication would have averted the action. The operative direction was to set aside the impugned orders.

Facts

The petitioner, M/s Parvinder Singh, filed a writ petition challenging an assessment order dated January 15, 2021, and an appellate order dated March 25, 2025. The petitioner, engaged in contractual work, regularly filed GST returns. A discrepancy was noted by the authorities: supplies of Rs. 10,25,422/- were made to Local Area Engineering Organisation, Works Division-1, Katihar, with CGST and SGST of Rs. 10,254.00 each deducted at source by the supplier as per GSTR-7. However, these supplies were allegedly not disclosed by the petitioner in the relevant period. The adjudicating authority issued a notice under Section 74 of the CGST/BGST Act, 2017, alleging deliberate non-disclosure. The petitioner claims to have filed returns for March 2020 on December 7, 2020, but the show cause notice dated December 10, 2020, was issued as if no return was filed. The petitioner argues this notice was uploaded under 'Additional Notices' and not served through other modes, leading to no response. The petitioner's business was later certified to have no tax dues as of September 30, 2021.

Key Issues

1. Whether the assessment order dated January 15, 2021, and the appellate order dated March 25, 2025, are liable to be set aside due to procedural irregularities in the issuance and service of the show cause notice under Section 74 of the CGST/BGST Act, 2017, and Rule 142(5) of the Rules? Petitioner's arguments: The petitioner contends that the show cause notice dated December 10, 2020, was not properly served, being uploaded only under 'Additional Notices' on the portal and not via email or SMS. This lack of proper service prevented the petitioner from responding. The petitioner asserts that returns were filed on December 7, 2020, and the authorities could have verified this on the common portal, making the assumption of non-filing erroneous. The petitioner also highlights that their business was later certified to have no tax dues. Revenue's arguments: The State argues that while the petitioner filed the return for March 2020 on December 7, 2020, in response to DRC-01A, they failed to intimate this to the adjudicating authority in the prescribed Form DRC-01B. The State further submits that the petitioner did not pay any interest on the delayed payment of admitted tax, justifying the issuance of the show cause notice under Section 74 for alleged concealment of turnover and tax liability. The State admits that had the petitioner intimated filing of the return via DRC-01B, no further proceedings would have been initiated.