M/S. Chaurasia Enterprises vs. The Union Of INDIA

Held

The Court held that the limitation period for assessment for the years 2017-18, 2018-19, and 2019-20 is extended to the extent of periods exempted by the Supreme Court and further notified by the respective governments. Therefore, the ground of limitation was found to be without merit. Regarding the contention on Section 61 and Rule 99, the Court clarified that Section 73 is a standalone provision that 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 scrutiny notice in Form GST ASMT-10. However, the Court found that in several writ petitions (specifically listed), assessment orders were passed without granting a personal hearing as mandated by Section 75(4). Consequently, these orders were set aside due to the violation of the statutory mandate for personal hearing. The matters were remitted to the respective Assessing Officers to issue a notice for affording an opportunity of personal hearing and to 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 and dismissed those petitions.

Facts

The petitioners, various private limited companies, partnership firms, and proprietary concerns, filed writ petitions before the Patna High Court challenging orders passed under the Goods and Services Tax (GST) Act. The petitions raised several contentions, including issues related to the limitation period for assessment, the procedure for scrutiny of returns under Section 61 and Rule 99, and the requirement of personal hearing under Section 75(4). The tax periods involved were primarily 2017-18, 2018-19, and 2019-20. The revenue authorities, including the State of Bihar and the Union of India, were the respondents. The core of the dispute revolved around whether the assessment orders were passed in accordance with the statutory provisions and procedural fairness.

Key Issues

1. Whether the limitation period for assessment for the years 2017-18, 2018-19, and 2019-20 stands extended due to the Supreme Court's order on the period of limitation and any subsequent government notifications, as per Section 168A of the GST Act. - Petitioner's contention: The limitation period should be extended to account for the period excluded by the Supreme Court and any relevant government notifications. - Revenue's contention: Not explicitly recorded, but implied that the limitation period was correctly applied. 2. Whether proceedings 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 contended by the petitioners. - 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: Not explicitly recorded, but implied that Section 73 can be invoked independently. 3. Whether an opportunity of personal hearing must be granted under Section 75(4) of the GST Act when an adverse decision is contemplated, even if the assessee has submitted a reply to the notice issued under Section 73. - Petitioner's contention: Section 75(4) mandates a personal hearing when an adverse decision is contemplated, regardless of whether a request for hearing was made. - Revenue's contention: Not explicitly recorded, but implied that the procedure followed was adequate.