Devendra Sah vs. The Union Of INDIA

Facts

The petitioner, Devendra Sah, challenged an order dated 08.03.2020 passed by the Assistant Commissioner, State Tax, Supaul Circle, imposing tax, interest, and penalty under Section 73 of the Bihar Goods and Services Tax Act, 2017, for the month of May 2018. The petitioner contended that the order was passed without affording the statutory 30 days' time as stipulated in Section 73(8) of the Act and in violation of the principles of natural justice, as the final order was passed on 08.03.2020, while the last date for submitting a reply was 11.03.2020. The petitioner also challenged the consequential DRC 07 dated 08.03.2020 for Rs. 195817.52. Furthermore, the petitioner challenged the appellate order dated 05.07.2021 passed by the Additional Commissioner (Appeal), State Taxes, Purnea Division, which rejected the petitioner's appeal ex-parte without a hearing.

Held

The Court held that the statutory period of 30 days mandated under Section 74(A) of the CGST/BGST Act, 2017, was not afforded to the petitioner for making payment and prior to the expiry of this period, the assessing officer proceeded to pass an ex-parte order. The notice dated 11.02.2020 directed the petitioner to file a reply on 11.03.2020, but the final order was passed on 08.03.2020, which was within the 30-day period. The Court found this to be a mandate of law that was not followed. Additionally, the appeal against the order dated 08.03.2020 was rejected ex-parte by the appellate authority on 05.07.2021, without considering the petitioner's contentions. Therefore, on these grounds alone, the Court quashed the notice dated 11.02.2020, the order of assessment dated 08.03.2020, and the appellate order dated 05.07.2021. The Court directed the assessing officer to issue a fresh notice in light of the statutory provisions and pass an appropriate order in accordance with law, ensuring compliance with the principles of natural justice. The Court also directed the de-freezing of the petitioner's bank accounts and imposed conditions for further deposits by the petitioner before the assessing authority, stating that all issues were left open and no opinion was expressed on merits.

Key Issues

1. Whether the order dated 08.03.2020, passed by the Assistant Commissioner, State Tax, Supaul Circle, is liable to be set aside for violation of Section 73(8) of the Bihar Goods and Services Tax Act, 2017, and the principles of natural justice, by not affording the statutory 30 days' time for reply and passing the order before the stipulated reply date? 2. Whether the appellate order dated 05.07.2021, passed by the Additional Commissioner (Appeal), State Taxes, Purnea Division, is liable to be set aside for being passed ex-parte without hearing the petitioner? Petitioner's Arguments: The petitioner argued that the assessing officer failed to provide the mandatory 30 days' notice period as required by Section 73(8) of the BGST Act, 2017. The notice dated 11.02.2020 set the reply date as 11.03.2020, but the final order was passed on 08.03.2020, well within the 30-day period. This also constituted a violation of the principles of natural justice. The petitioner further argued that the appellate authority rejected the appeal ex-parte without providing a hearing, which is also a violation of natural justice. Revenue's Arguments: The judgment does not record any specific arguments made by the respondents (revenue or State).