Devendra Sah vs. The Union Of INDIA

Facts

The petitioner, Devendra Sah, challenged an order dated March 9, 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. The petitioner contended that the order was passed prematurely, before the expiry of the 30-day statutory period granted in the show cause notice dated February 11, 2020, which stipulated a reply date of March 11, 2020. The petitioner also challenged the appellate order dated July 5, 2021, which rejected his appeal. The petitioner argued that both orders violated Section 73(8) of the BGST Act and the principles of natural justice.

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 or filing a reply. The assessing officer proceeded to pass an ex parte order before the expiry of the 30-day period. The show cause notice dated February 11, 2020, directed the petitioner to file a reply on March 11, 2020, but the final order was passed on March 9, 2020. This was a mandate of law that was not followed. Furthermore, the appellate order dated July 5, 2021, was rejected ex parte without considering the petitioner's contentions. Consequently, the Court quashed the show cause notice, the assessment order, and the appellate order. The Court directed the assessing officer to issue a fresh notice in light of statutory provisions and pass an appropriate order in accordance with law, complying with the principles of natural justice. The Court also directed the de-freezing of the petitioner's bank account and imposed conditions regarding the deposit of 10% of the total demand and an additional 10% of the demanded amount within specified timelines, without prejudice to the rights of the parties.

Key Issues

1. Whether the order dated March 9, 2020, passed by the Assistant Commissioner, State Tax, Supaul Circle, is liable to be set aside for being in gross violation of Section 73(8) of the Bihar Goods and Services Tax Act, 2017, and the principles of natural justice, by prematurely imposing tax, interest, and penalty without affording the statutory 30-day period for reply as mentioned in the show cause notice dated February 11, 2020. 2. Whether the appellate order dated July 5, 2021, is liable to be set aside for rejecting the petitioner's appeal without considering his contentions. Petitioner's Arguments: The petitioner argued that the assessing officer passed the final order on March 9, 2020, which was before the expiry of the 30-day period granted in the show cause notice dated February 11, 2020 (reply due March 11, 2020). This violated Section 73(8) of the BGST Act and the principles of natural justice. The appellate order was also passed ex parte without considering the appeal contentions. Revenue's Arguments: The judgment records no specific arguments from the respondent revenue authorities.