M/S Manya Marketing vs. The Union Of INDIA

Held

The Court held that the limitation period for assessment is extended to the extent of periods exempted by the Supreme Court, but only to the extent notified by the respective governments. Therefore, the ground of limitation was found to be without merit. Regarding the procedure under Section 61 and Section 73, the Court held that Section 73 is a standalone provision that can be invoked independently when it appears to the Proper Officer that there has been an escapement of tax, erroneous refund, or wrongful claim of input tax credit. It is not mandatory for every proceeding under Section 73 to be preceded by a notice in Form GST ASMT-10; the proceeding under Section 73 itself is preceded by a notice. The Court found that the gravity of a discrepancy noticed on scrutiny of returns is lesser than when it appears to the Proper Officer that there is an escapement of tax. Crucially, the Court held that Section 75(4) mandates that an opportunity of hearing must be granted where an adverse decision is contemplated, even without a specific request from the assessee. Consequently, assessment orders passed without granting a personal hearing were set aside and remitted to the respective Assessing Officers for affording an opportunity of personal hearing. For cases 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 orders passed by GST authorities. The petitions raised various contentions, including issues related to the limitation period for assessment, the procedure for scrutiny of returns under Section 61, and the requirement of a personal hearing under Section 75(4) before passing adverse orders. The tax periods in dispute were not explicitly stated for all petitioners but included years like 2017-18, 2018-19, and 2019-20. The authorities challenged were primarily Assistant Commissioners and Deputy Commissioners of State Tax, and the Union of India.

Key Issues

1. Whether the limitation period for issuing assessment orders is extended by the Supreme Court's order regarding COVID-19 related extensions, and if so, to what extent, considering any subsequent government notifications? - Petitioner's contention: The Supreme Court's exclusion of time periods should extend the limitation for filing final returns and subsequent assessments. - Revenue's contention: Not explicitly recorded, but implied that the limitation period is as per statutory provisions and notifications. 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? - 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 is a standalone provision. 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 no specific request for hearing is made by the assessee? - Petitioner's contention: Section 75(4) mandates a personal hearing when an adverse decision is contemplated, regardless of whether a request is made. - Revenue's contention: Not explicitly recorded.