M/S Alkem Laboratories LTD. vs. The Union Of INDIA

Held

The Court held that the limitation period for issuing demand notices 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 and does not mandate that it must be preceded by a scrutiny of returns under Section 61 and the issuance of a notice in Form GST ASMT-10. However, the Court emphasized that Section 75(4) mandates an opportunity of hearing when a reply has been submitted and an adverse decision is contemplated. Consequently, for writ petitions where assessment orders were passed without granting a personal hearing, the orders were set aside, and the matters were remitted to the respective Assessing Officers to issue a notice for affording an opportunity of personal hearing. For petitions where a personal hearing was afforded, the Court found no reason to interfere. The ratio is that while Section 73 is independent of Section 61, the procedural fairness under Section 75(4) regarding personal hearings must be adhered to when adverse decisions are contemplated after a reply is filed.

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 grounds, including issues related to the limitation period for issuing demand notices, the procedure for scrutiny of returns under Section 61, and the requirement of a personal hearing under Section 75(4). The tax periods involved were primarily 2017-18, 2018-19, and 2019-20. The authorities issuing the impugned orders were various Assistant Commissioners, Deputy Commissioners, and Commissioners of State Tax and Central Tax.

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) - Petitioner's contention: The limitation period is extended by the Supreme Court's exclusions and any subsequent government notifications. - Revenue's contention: Not explicitly recorded, but impliedly argued 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, followed by consideration of the assessee's explanation? (Question of mixed law and fact) - Petitioner's contention: Section 73 proceedings must be preceded by Section 61 scrutiny and a proper response to the notice. - Revenue's contention: Section 73 is a standalone provision that can be invoked independently of Section 61 scrutiny. 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? (Question of law) - Petitioner's contention: Section 75(4) mandates a personal hearing in such circumstances. - Revenue's contention: Not explicitly recorded, but impliedly argued that the hearing process, if any, was adequate.