M/S Shankar Traders vs. The State Of Bihar

Held

The Court addressed three main contentions. Firstly, regarding limitation, it held that the period of limitation for the tax periods 2017-18, 2018-19, and 2019-20 would stand extended to the extent notified by the respective governments, aligning with the Supreme Court's exclusion of time periods. The Court found no reason to interfere with the orders on the ground of limitation. Secondly, concerning Section 61 and Section 73, the Court held that Section 73 is a standalone provision and does not require prior scrutiny under Section 61 and notice in Form GST ASMT-10. Proceedings under Section 73 can be initiated directly if it appears to the Proper Officer that tax has been short-paid or wrongly availed, and the notice issued under Section 73 itself provides the opportunity for explanation. Thirdly, and crucially, the Court held that Section 75(4) mandates an opportunity of hearing when an adverse decision is contemplated, even without a specific request from the assessee. For the writ petitions where assessment orders were passed without granting a personal hearing, the Court set aside the orders and remitted the matters to the respective Assessing Officers for affording an opportunity of personal hearing. For petitions where a personal hearing was afforded, the Court found no reason to interfere. The writ petitions were allowed to the limited extent of remand for personal hearing, while other grounds were found to be without merit.

Facts

Multiple petitioners, including M/s Barhonia Engicon Private Limited, Vinod Singh, M/s Anand Consultant, Technoculture Building Centre Pvt Ltd, M/s Devendra Prasad, M/s Shankar Traders, M/s Nirav Enterprises, M/s Harilal Ventures Private Limited, and others, filed writ petitions before the Patna High Court challenging orders passed by various GST authorities. The petitions raised contentions related to limitation periods, the procedure under Section 61 and Rule 99 of the GST Act, and the requirement of personal hearings under Section 75(4). The tax periods involved were primarily 2017-18, 2018-19, and 2019-20. The core dispute revolved around the validity of assessment orders passed without adequate procedural safeguards.

Key Issues

1. Whether the limitation period for issuing assessment orders for the tax periods 2017-18, 2018-19, and 2019-20 stands extended due to the Supreme Court's order and subsequent government notifications, as per Section 168A of the GST Act. - Petitioner's contention: The Supreme Court's exclusion of time periods should be applied, extending the limitation. The respondents argued that notifications issued by the respective governments would govern the extent of extension. 2. Whether proceedings under Section 73 of the GST Act can be initiated without first undertaking scrutiny of returns under Section 61 and issuing a notice in Form GST ASMT-10 as prescribed by Rule 99. - Petitioner's contention: Section 73 proceedings must be preceded by scrutiny under Section 61 and a notice in Form GST ASMT-10, with consideration of the assessee's explanation. - Revenue's contention: Section 73 is a standalone provision and does not mandate prior scrutiny under Section 61. A notice under Section 73 itself is sufficient. 3. Whether an opportunity of personal hearing must be granted under Section 75(4) of the GST Act when an adverse decision is contemplated against the assessee, even if no specific request for hearing is made. - Petitioner's contention: Section 75(4) mandates a personal hearing when an adverse decision is contemplated, irrespective of a request from the assessee. - Revenue's contention: Not explicitly recorded, but impliedly, that the procedure followed was compliant.