Sudhir Kumar Jha @ Sudheer Kumar Jha vs. The State Of Bihar

Facts

The petitioner, Sudhir Kumar Jha, challenged a final order dated February 10, 2022, passed by the Assistant Commissioner, State Taxes, Patna South: Patna West Circle, Bihar, under Section 73(9) of the Bihar Goods and Services Tax Act, 2017. This order imposed tax, interest, and penalty for March 2020. The petitioner contended that the notice under Section 73(1) was issued on January 5, 2021, granting only until January 22, 2021, for a reply, which is less than the mandatory 30 days. The petitioner also challenged the consequential demand in DRC 07 dated February 10, 2021, and the attachment of his account via DRC 13 dated February 26, 2022, both based on the aforementioned order. The State Bank of India, Benipur Branch, was also listed as a respondent.

Held

The Court held that the notice dated January 5, 2021, which directed the petitioner to file a reply by January 22, 2021, failed to provide the minimum statutory period of 30 days mandated under Section 74(A) of the CGST/BGST Act, 2017. The Court found that this period was not afforded to the petitioner for making payment due and that the assessing officer proceeded to pass an ex parte order prior to the expiry of the 30-day period. The Court emphasized that the mandate of law requires 30 days' period to be afforded to the parties, which was not done in this case. Consequently, on this ground alone, the Court quashed the notice dated January 5, 2021, and the assessment order dated February 10, 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 the law. The Court also directed that all proceedings be positively complied with. The ratio of the decision is that failure to provide the statutory minimum notice period renders the subsequent assessment order invalid.

Key Issues

1. Whether the notice issued under Section 73(1) of the Bihar Goods and Services Tax Act, 2017, providing less than the mandatory 30 days for a reply, violates the principles of natural justice and statutory requirements? Petitioner's arguments: The petitioner argued that the notice dated January 5, 2021, requiring a reply by January 22, 2021, violated Section 73(8) of the Bihar Goods and Services Tax Act, 2017, which mandates a minimum of 30 days' notice. This contention was supported by a previous judgment of the High Court in CWJC No. 3374/2021 dated October 28, 2021. The petitioner also argued that the subsequent order and consequential demand/attachment were passed in gross violation of natural justice and statutory provisions. Revenue's arguments: The judgment does not record any specific arguments made by the revenue or state respondents.