New Indian Ent Udyoug vs. The Union Of INDIA

Held

The Court held that the orders passed by the Assistant Commissioner of State Tax were liable to be set aside due to procedural irregularities. Regarding the issue of limitation, the Court noted that the circulars extending the limitation period were not challenged by the petitioner. However, the Court found merit in the petitioner's contention that they were not granted sufficient opportunity. The show-cause notices were issued on November 9, 2023, granting time until December 9, 2023, to file a reply. Despite this, the impugned orders were passed on December 6, 2023, before the expiry of the reply period and without affording a personal hearing, which is a mandatory requirement under Section 75(4) of the BGST Act. Consequently, the Court set aside the impugned orders. The petitioner was granted liberty to file a reply within four weeks from the date of the order and directed to appear before the Assessing Officer on December 4, 2024, for a hearing. The Court explicitly left the question of limitation open for the petitioner to challenge the circulars if they so desired. The petitions were disposed of without any observations on the merits of the assessment.

Facts

The petitioner, New Indian Ent Udyoug, a sole proprietorship firm, filed multiple writ petitions before the Patna High Court challenging orders passed under Section 73 of the Bihar Goods and Services Tax Act, 2017. These orders pertained to assessment years 2021-22, 2022-23, 2018-19, 2020-21, and 2019-20. The petitioner's primary contentions were that the orders were passed beyond the limitation period and that they were not granted sufficient opportunity to present their case. The revenue, represented by the Assistant Commissioner of State Tax, Madhubani, argued that circulars extended the limitation period, and the Supreme Court's suo motu order in Re: Cognizance For Extension of Limitation also supported this. The petitioner argued that the orders were passed prematurely, before the expiry of the time granted for filing a reply and without a personal hearing.

Key Issues

1. Whether the orders passed under Section 73 of the Bihar Goods and Services Tax Act, 2017, were barred by limitation, considering the relevant circulars and the Supreme Court's order in Suo Motu Writ Petition (C) No. 3 of 2020? 2. Whether the petitioner was afforded sufficient opportunity to file a reply and participate in a personal hearing before the impugned orders were passed? Petitioner's Arguments: The petitioner contended that the orders were passed beyond the statutory limitation period. Furthermore, they argued that the Assistant Commissioner passed the orders on December 6, 2023, even though the show-cause notices issued on November 9, 2023, granted time to file a reply until December 9, 2023. This premature passing of orders, without allowing the full period for response and without granting a personal hearing, violated principles of natural justice and Section 75(4) of the BGST Act. Revenue's Arguments: The revenue contended that circulars issued by the department extended the period of limitation. They also referred to the Supreme Court's judgment in Suo Motu Writ Petition (C) No. 3 of 2020, which provided for the extension of limitation periods. The revenue did not explicitly address the contention regarding the lack of sufficient opportunity for a personal hearing.