Devendra Sah vs. The Union Of INDIA

Facts

The petitioner, Devendra Sah, challenged an order dated March 8, 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 June 2018. The petitioner contended that the order was passed without affording the statutory 30-day period stipulated in Section 73(8) and in violation of natural justice, as the final order was issued on March 9, 2020, while the last date for submitting a reply was March 11, 2020. A consequential demand order (DRC-07) for Rs. 96,864.48 was also challenged. Furthermore, the petitioner's appeal against the assessment order was rejected ex-parte by the Additional Commissioner (Appeal) on July 5, 2021, without a hearing.

Held

The Court held that the statutory period of 30 days mandated under Section 73(8) of the CGST/BGST Act, 2017, was not afforded to the petitioner for making payment. The assessing officer proceeded to pass an ex-parte order before the expiry of this 30-day period. The notice dated February 11, 2020, directed the petitioner to file a reply by March 11, 2020, but the final order was passed on March 9, 2020. This was a clear violation of the mandate of law. Additionally, the appellate order dated July 5, 2021, was passed ex-parte without considering the petitioner's contentions. Consequently, the Court quashed the notice dated February 11, 2020, the assessment order dated March 9, 2020, and the appellate order dated July 5, 2021. The Court directed the assessing officer to issue a fresh notice in compliance with statutory provisions and pass an appropriate order in accordance with law after affording adequate opportunity to all concerned, including the petitioner, and complying with the principles of natural justice. The Court also directed the de-freezing of the petitioner's bank accounts and stipulated conditions for further deposits and expeditious disposal of the case, stating that it had not expressed any opinion on the merits of the case.

Key Issues

1. Whether the order dated March 8, 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-day period for reply and passing the order prematurely? 2. Whether the appellate order dated July 5, 2021, passed by the Additional Commissioner (Appeal) is liable to be set aside for rejecting the petitioner's appeal ex-parte without providing an opportunity of hearing? Petitioner's Arguments: The petitioner argued that the assessing officer failed to provide the mandatory 30-day notice period as required by Section 73(8) of the BGST Act, 2017, and passed the final order before the expiry of this period, thereby violating principles of natural justice. The petitioner also contended that the appellate authority rejected the appeal ex-parte without affording a hearing. Reliance was placed on the statutory provisions of Section 73(8) and the principles of natural justice. Revenue's Arguments: The judgment does not record any specific arguments made by the respondents (Revenue).