M/S Shankar Traders vs. The State Of Bihar

Held

The Court held that the limitation period for issuing assessment orders is extended to the extent of periods exempted by the Supreme Court, but only up to the notified period by the respective governments. Regarding the procedure for Section 73 proceedings, the Court found that Section 73 is a standalone provision and does not require a preceding scrutiny under Section 61 with a notice in Form GST ASMT-10. However, it clarified that if scrutiny of returns reveals discrepancies, the assessee must be informed, and if the explanation is unsatisfactory or not submitted, further proceedings can be initiated under Section 73 or 74. Crucially, the Court held that Section 75(4) mandates an opportunity of personal hearing when an adverse decision is contemplated, even if no specific request is made by the assessee. For cases where assessment orders were passed without granting a personal hearing, the orders were set aside and the matters were remitted to the Assessing Officers for affording a personal hearing. For cases where a personal hearing was afforded, the Court found no reason to interfere with the impugned orders.

Facts

Several petitioners, including M/s Barhonia Engicon Private Limited and M/s Anand Consultant, filed writ petitions before the Patna High Court challenging orders passed under the Goods and Services Tax (GST) Act. The petitions raised multiple contentions, including issues related to the limitation period for assessment, the procedure for scrutiny of returns under Section 61, and the requirement for personal hearings under Section 75(4). The revenue authorities, including the State of Bihar and the Union of India, were respondents. The tax periods in dispute were not explicitly stated for all petitioners but included years like 2017-18, 2018-19, and 2019-20 for some.

Key Issues

1. Whether the limitation period for issuing assessment orders is extended by the Supreme Court's orders regarding the COVID-19 pandemic, and if so, to what extent, considering any government notifications? - Petitioner's contention: The Supreme Court's exclusion of time periods should extend the limitation for assessment, as the original limitation dates fall after the excluded period. - Revenue's contention: Not explicitly recorded, but impliedly argued that the limitation is as per statutory provisions and notifications. 2. Whether proceedings under Section 73 of the GST Act can be initiated without first completing the scrutiny of returns under Section 61 and issuing a notice in Form GST ASMT-10? - Petitioner's contention: Section 73 proceedings must be preceded by scrutiny under Section 61, including issuing a notice in Form GST ASMT-10 and considering the assessee's explanation. - Revenue's contention: Not explicitly recorded, but impliedly argued that Section 73 is a standalone provision. 3. Whether an opportunity of personal hearing is mandatory under Section 75(4) of the GST Act before passing an adverse order, even if the assessee has submitted a reply to the notice? - Petitioner's contention: Section 75(4) mandates a personal hearing when an adverse decision is contemplated, irrespective of whether a request is made. - Revenue's contention: Not explicitly recorded.