M/S Pushpak Pharmaceuticals vs. The Union Ofindia

Held

The Court held that the limitation period for issuing notices and orders under the GST Act is indeed extended by the period excluded by the Supreme Court's orders and further by any notifications issued by the respective governments. Regarding the procedure for Section 73 proceedings, the Court found 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 such proceedings to be preceded by a scrutiny under Section 61 and the issuance of a notice in Form GST ASMT-10, as Section 73 itself is preceded by a notice. However, the Court emphasized that Section 75(4) mandates an opportunity of hearing when an adverse decision is contemplated, even if no specific request is made by the assessee. Consequently, assessment orders passed without granting a personal hearing in such circumstances were set aside. The matters were remitted to the respective Assessing Officers to issue a notice 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 and others, filed writ petitions before the Patna High Court challenging orders passed under the GST Act. The petitions raised various grounds, including issues related to the limitation period for issuing notices and orders, the procedure for scrutiny of returns under Section 61, and the requirement of personal hearings 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 stated for all petitioners, but the discussions on limitation 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 notices and orders under 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 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, followed by consideration of the assessee's explanation? (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 to a notice under Section 73 has been submitted and an adverse decision is contemplated, even without a specific request for hearing from the assessee? (Question of law) Petitioner's arguments: - The limitation period for issuing notices and orders should be extended by the period excluded by the Supreme Court and any subsequent government notifications. - Proceedings under Section 73 must be preceded by scrutiny under Section 61, including the issuance of Form GST ASMT-10 and consideration of the assessee's explanation. - Section 75(4) mandates a personal hearing when an adverse decision is contemplated, irrespective of whether a specific request is made. Revenue's arguments: - The judgment does not explicitly record arguments from the revenue side on these specific issues, but implicitly defends the orders passed.