M/S Mother INDIA Construction PVT. LTD. vs. The Union Of INDIA

Held

The Court held that the limitation period for issuing demand notices is indeed extended by the periods excluded by the Supreme Court's orders and further by any notifications issued by the respective governments. Therefore, the contention regarding limitation was found to be without reason to interfere with the orders. Regarding the procedure for scrutiny, the Court held that Section 73 is a standalone provision and can be invoked independently when it appears to the Proper Officer that there is tax escapement, erroneous refund, or wrongful claim of input tax credit. It is not mandatory for every Section 73 proceeding to be preceded by a notice under Section 61 and Rule 99. However, the Court found that in several writ petitions, assessment orders were passed without granting a personal hearing as mandated by Section 75(4). In such cases, the orders were set aside due to the violation of the statutory mandate for a personal hearing. The matters were remitted to the respective Assessing Officers to issue a notice for affording an opportunity of personal hearing and pass fresh orders within three months or the remaining limitation period, whichever is later. For petitions where a personal hearing was afforded, the Court found no reason to interfere with the impugned orders.

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 various orders passed under the Goods and Services Tax (GST) Act. The petitions raised contentions related to the limitation period for issuing demand notices, the procedure for scrutiny of returns under Section 61 and Rule 99, and the requirement of a personal hearing under Section 75(4) before passing adverse orders. The tax periods involved spanned from 2017-18 onwards. The revenue authorities, including the State of Bihar and the Union of India, were the respondents.

Key Issues

1. Whether the limitation period for issuing demand notices under Section 73 of the GST Act is extended by the period excluded by the Supreme Court's orders, and further by any notifications issued by the respective governments? (Question of law) 2. Whether a proceeding under Section 73 of the GST Act can be initiated without first undertaking a scrutiny of returns under Section 61 and issuing a notice in Form GST ASMT-10 as per Rule 99? (Question of mixed law and fact) 3. Whether an opportunity of personal hearing must be granted under Section 75(4) of the GST Act when a reply has been submitted to a notice issued under Section 73 and an adverse decision is contemplated? (Question of law) Petitioner's Contentions: - The limitation period for issuing demand notices should be extended by the periods excluded by the Supreme Court and any government notifications. - Proceedings under Section 73 must be preceded by scrutiny under Section 61 and a notice in Form GST ASMT-10, with consideration of the assessee's explanation. - A personal hearing is mandatory under Section 75(4) before passing any adverse order, even if a reply has been filed. Revenue's Contentions: - The judgment does not explicitly record the revenue's contentions on these specific issues, but implicitly defends the orders passed.