M/S Sain Enterprises vs. The Union Of INDIA

Held

The Court held that the provisions of Section 75(4) of the BGST Act were not violated, as Annexure-P/3, produced by the petitioner, indicated that a show cause notice affording an opportunity for personal hearing had been issued. Regarding the pre-deposit for appeals to the GST Tribunal, the Court noted the amendment to Section 112 of the CGST Act, reducing the pre-deposit from twenty per cent to ten per cent. Since the Tribunal has not yet been constituted, the Court directed that the petitioner, upon payment of ten per cent of the disputed tax amount (in addition to any amount already deposited under Section 107(6) of the BGST Act), would be entitled to a stay of recovery until the Tribunal is constituted and an appeal is filed. The Court emphasized that this stay would not be open-ended and the petitioner would be required to file their appeal once the Tribunal is functional. If the petitioner fails to file an appeal within the specified period after the Tribunal's constitution, the revenue authorities would be at liberty to proceed. The Court also directed the release of any bank account attachment if the ten per cent deposit is made.

Facts

The petitioner, M/s Sain Enterprises, challenged an order (Annexure-P/3) before the Patna High Court. The grounds for challenge included the extension of limitation and the alleged denial of a personal hearing under Section 75(4) of the Bihar Goods and Services Tax (BGST) Act. The petitioner contended that the order was passed without affording them an opportunity for a personal hearing. The respondents are the Union of India and the State of Bihar, along with various tax authorities. The judgment notes that the issue of limitation had been decided against the petitioner in a previous case, M/s Barhonia Engicon Private Limited v. The Union of India and Ors. The court examined Annexure-P/3 and found it indicated a show cause notice that did offer an opportunity for personal hearing.

Key Issues

1. Whether the order under challenge (Annexure-P/3) was passed in violation of Section 75(4) of the BGST Act by denying the petitioner an opportunity for a personal hearing? 2. What is the appropriate pre-deposit amount for filing an appeal before the Goods and Services Tax Tribunal, given the amendment to Section 112 of the Central Goods and Services Tax Act, 2017, and the non-constitution of the Tribunal? Petitioner's arguments: The petitioner argued that they were not afforded a personal hearing as required by Section 75(4) of the BGST Act. They also relied on the court's previous judgments regarding the pre-deposit amount and stay of recovery in the absence of a constituted GST Tribunal. Revenue/State's arguments: The respondents did not explicitly record arguments on the personal hearing issue. However, their production of Annexure-P/3, which indicated a show cause notice with an opportunity for personal hearing, implicitly countered the petitioner's claim. Regarding the pre-deposit, the judgment refers to an amendment reducing it to ten per cent effective from 01.11.2024.