M/S Devendra Prasad vs. The State Of Bihar

Held

The Court held that the limitation period for the subject years (2017-18, 2018-19, and 2019-20) would stand extended to the extent of periods exempted by the Hon'ble Supreme Court, and also by any notifications issued by the respective Governments extending the period of limitation. Regarding the contention on Section 61 and Rule 99, the Court found that Section 73 is a standalone provision that can be invoked when it appears to the Proper Officer that tax has not been paid, short-paid, erroneously refunded, or input tax credit has been wrongly availed or utilized. It clarified that a proceeding under Section 73 is itself preceded by a notice, and it is not mandatory for every Section 73 proceeding to be preceded by a notice in Form GST ASMT-10. However, the Court found that in several writ petitions, assessment orders were passed without granting a personal hearing as mandated by Section 75(4). Consequently, these orders were set aside due to the violation of the statutory mandate for a personal hearing. 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 from the date of the judgment or within 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 various orders passed under the Goods and Services Tax (GST) regime. The petitions raised several contentions, including issues related to the limitation period for assessment, 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 disputes involved tax periods for 2017-18, 2018-19, and 2019-20, with some petitioners arguing that the Supreme Court's extension of limitation periods should apply. Others contended that assessment orders were passed without proper scrutiny notice or personal hearing.

Key Issues

1. Whether the limitation period for assessment for the tax periods 2017-18, 2018-19, and 2019-20 is extended by the periods excluded by the Hon'ble Supreme Court, and if so, to what extent? 2. Whether proceedings under Section 73 of the GST Act can be initiated without first issuing a notice under Section 61 and Rule 99 for scrutiny of returns and considering the assessee's explanation? 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? Petitioner's arguments: The petitioners argued that the Supreme Court's extension of limitation periods should be applied to their cases, thereby extending the time for assessment. They contended that Section 73 proceedings are contingent upon the completion of scrutiny under Section 61 and Rule 99, requiring a notice and consideration of their explanation before initiating such proceedings. Furthermore, they asserted that Section 75(4) mandates a personal hearing when an adverse decision is contemplated, irrespective of whether a specific request for hearing is made, especially after a reply has been filed.