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 February 2018 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 08.02.2020, violating Section 73(8) and principles of natural justice. A consequential DRC-07 for Rs. 223990.96 was also challenged. The petitioner's appeal against the assessment order was rejected ex-parte by the Additional Commissioner (Appeal) on 05.07.2021. The petitioner sought to set aside these orders and the consequential demand.

Held

The Court held that the minimum statutory period of 30 days mandated under Section 74(A) of the CGST/BGST Act, 2017, was not afforded to the petitioner. The notice dated 08.02.2020 directed the petitioner to file a reply by 08.03.2020, while the final order was passed on the same day, i.e., within the 30-day period. This was a mandate of law that was not followed. Furthermore, the appellate order was rejected ex-parte without considering the contentions raised. On these grounds alone, 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, ensuring compliance with principles of natural justice. The Court also directed the de-freezing of the petitioner's bank accounts and specified conditions for further deposits and appearance before the assessing authority. The Court explicitly stated that it had not expressed any opinion on merits and all issues were left open.

Key Issues

1. Whether the order dated 08.03.2020, passed by the Assistant Commissioner, State Tax, Supaul Circle, imposing tax, interest, and penalty for February 2018, is liable to be set aside for being passed in gross 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 mentioned in the show cause notice dated 08.02.2020. 2. Whether the appellate order dated 05.07.2021, rejecting the petitioner's appeal ex-parte, is liable to be set aside. Petitioner's Contentions: The petitioner argued that the assessing officer passed the final order on 08.03.2020, which was the last date provided in the show cause notice, but before the expiry of the 30-day statutory period mandated by law. This premature action violated Section 73(8) of the Bihar Goods and Services Tax Act, 2017, and the principles of natural justice. The appellate order was also challenged for being passed ex-parte without considering the petitioner's contentions. Revenue's Contentions: The judgment records no specific arguments from the respondents.