M/S Zee Saheb vs. The Union Of INDIA

Held

The Court held that the limitation period for issuing demand notices is indeed extended by the periods excluded by the Supreme Court and further by any government notifications. However, the extension is limited to what is notified. Regarding the procedure for Section 73 proceedings, the Court clarified that Section 73 is a standalone provision and does not mandatorily require prior completion of scrutiny under Section 61 and issuance of ASMT-10 notice before initiating proceedings. While scrutiny is a procedure, if the Proper Officer believes tax has been short-paid or wrongly availed, Section 73 can be invoked directly. The Court emphasized that a notice under Section 73 itself constitutes the commencement of proceedings. Crucially, the Court found that in several writ petitions (CWJC No. 4180 of 2024 and others), assessment orders were passed without granting a personal hearing as mandated by Section 75(4) when an adverse decision was contemplated after a reply was filed. 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 notices for affording an opportunity of personal hearing and to pass fresh orders within three months or the remaining limitation period. For petitions where a personal hearing was afforded (CWJC No. 4505/2024 and others), the Court found no reason to interfere and rejected those petitions.

Facts

Multiple petitioners, including M/s Barhonia Engicon Private Limited and Vinod Singh, filed writ petitions before the Patna High Court challenging various orders passed under the Goods and Services Tax (GST) regime. The petitions raised contentions related to the limitation period for issuing demand notices, the procedure for scrutiny of returns under Section 61 and Rule 99, 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 respondents. The tax periods involved were primarily 2017-18, 2018-19, and 2019-20. The core of the dispute revolved around whether assessment orders were passed in compliance with statutory procedures and limitations.

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 any subsequent government notifications, particularly for the tax periods 2017-18, 2018-19, and 2019-20? (Question of law) 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 as prescribed by Rule 99? (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 written request for a hearing? Petitioner's arguments: The petitioners contended that the limitation period should be extended as per Supreme Court orders and government notifications. They argued that Section 73 proceedings require prior scrutiny under Section 61 and issuance of ASMT-10 notice. They also asserted that Section 75(4) mandates a personal hearing when an adverse decision is contemplated after a reply is filed. Revenue's arguments: The judgment does not explicitly record arguments from the revenue side on these specific points, but implicitly, their actions suggest they believed the notices and orders were validly issued within the prescribed limitations and procedures.