Pammi Devi vs. The Union Of INDIA

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. Therefore, the contention regarding limitation was found to be without reason to interfere with the orders. On the issue of 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 is tax escapement, 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, as Section 73 itself is preceded by a notice. The Court clarified that if scrutiny of returns leads to unsatisfactory explanations or no explanation, further proceedings can be taken under Sections 65, 66, 67, 73, or 74. Regarding Section 75(4), the Court unequivocally held that an opportunity of hearing must be granted when an adverse decision is contemplated, even without a specific request from the assessee, especially after a reply has been submitted. Consequently, assessment orders passed without granting a personal hearing under Section 75(4) were set aside. The matters were remitted to the respective Assessing Officers to issue notices for affording an opportunity of personal hearing and to pass orders within three months or the remaining limitation period, whichever is later. 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, M/s Anand Consultant, 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 several 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). The revenue authorities, including the State of Bihar and the Union of India, were the respondents. The tax periods in dispute were not explicitly detailed for all petitioners, but the limitation period discussions referred to 2017-18, 2018-19, and 2019-20. The core of the dispute revolved around the validity of assessment orders passed without adhering to certain procedural requirements.

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 notifications issued by the respective governments? (Question of law) - Petitioner's contention: The limitation period for the subject years (2017-18, 2018-19, 2019-20) falls after February 28, 2022, and is thus extended by the Supreme Court's orders. The revenue's notifications also extend this period. - Revenue's contention: Not explicitly recorded, but impliedly argued that the limitation period was correctly applied or that the Supreme Court's extension was limited by government 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, followed by consideration of the assessee's explanation? (Question of mixed law and fact) - Petitioner's contention: Section 73 proceedings must be preceded by scrutiny under Section 61, including issuance of notice in Form GST ASMT-10 and consideration of the assessee's explanation. - Revenue's contention: Section 73 is a standalone provision that can be invoked independently of the scrutiny process under Section 61. 3. Whether an opportunity of personal hearing must be granted under Section 75(4) of the GST Act before passing an adverse order, even if the assessee has submitted a reply to the notice issued under Section 73? (Question of law) - Petitioner's contention: Section 75(4) mandates a personal hearing when an adverse decision is contemplated, irrespective of whether a request for hearing is made, especially after a reply has been submitted. - Revenue's contention: Not explicitly recorded, but impliedly argued that the procedure followed was compliant or that a personal hearing was not mandatory in all cases.