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 for September 2018 under Section 73 of the Bihar Goods and Services Tax Act, 2017. The petitioner contended that the order was passed without affording the statutory 30 days' time stipulated in Section 73(8) and in violation of natural justice, as the final order was issued on 08.03.2020, prior to the reply submission deadline of 11.03.2020. The petitioner also challenged the consequential Demand and Recovery Certificate (DRC-07) dated 08.03.2020 for Rs. 2,23,627.40. Further, an appeal against the initial order was rejected ex-parte by the Additional Commissioner (Appeal) on 05.07.2021 without hearing the petitioner.

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 that the assessing officer proceeded to pass an ex-parte order prior to the expiry of this period. 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 appellate order dated 05.07.2021 was rejected ex-parte without considering the petitioner's contentions. On these grounds alone, the Court quashed the notice dated 11.02.2020, the assessment order 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 statutory provisions and pass an appropriate order in accordance with law, ensuring compliance with principles of natural justice. The Court also directed the de-freezing of the petitioner's bank accounts and specified deposit conditions for the petitioner. All issues were left open for decision on merits, and no opinion was expressed on the merits of the case.

Key Issues

1. Whether the order dated 08.03.2020, imposing tax, interest, and penalty under Section 73 of the Bihar Goods and Services Tax Act, 2017, is liable to be set aside for violation of the statutory 30-day period for reply and principles of natural justice, specifically Section 73(8) and the notice dated 11.02.2020 setting the reply date as 11.03.2020 while the order was passed on 08.03.2020? 2. Whether the appellate order dated 05.07.2021, rejecting the petitioner's appeal ex-parte, is liable to be set aside for non-compliance with the principles of natural justice? Petitioner's Arguments: The petitioner argued that the assessing officer failed to provide the mandatory 30 days' notice as required by Section 73(8) of the Bihar Goods and Services Tax Act, 2017. The notice issued directed a reply by 11.03.2020, but the final order was passed on 08.03.2020, violating both the statutory period and the principles of natural justice. Furthermore, the appellate authority rejected the appeal ex-parte without affording a hearing, also violating natural justice. Revenue's Arguments: The judgment does not record any specific arguments made by the respondents (revenue).