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

Facts

The petitioner, Sudhir Kumar Jha, challenged an undated order passed by the Assistant Commissioner, State Taxes, Patna South Circle, under Section 73(9) of the Bihar Goods and Services Tax Act, 2017. This order imposed tax and interest for October 2019. The petitioner contended that the notice issued under Section 73(1) on January 5, 2021, demanding a reply by January 22, 2021, violated the mandatory 30-day notice period. The petitioner also challenged the consequential demand in DRC-07 dated February 10, 2021, which was based on the aforementioned order. The revenue did not dispute the facts regarding the notice period.

Held

The Court held that the notice dated January 5, 2021, and the subsequent assessment order dated February 10, 2021, were passed in violation of the statutory mandate. The Court found that the petitioner was not afforded the minimum statutory period of 30 days as required by Section 73(8) of the Bihar Goods and Services Tax Act, 2017, and Section 74(A) of the CGST/BGST Act, 2017. The notice required a reply within 17 days, which is less than the prescribed 30 days. The Court reasoned that this failure to provide adequate time for response constitutes a violation of the principles of natural justice. Consequently, the Court quashed both the notice and the assessment order. The Court directed the assessing officer to issue a fresh notice in compliance with the statutory provisions and pass an appropriate order thereafter. The petitioner undertook to appear before the Assessing Authority on March 28, 2022, and cooperate with the proceedings. The Assessing Authority was directed to decide the matter within four weeks of the petitioner's appearance.

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 reply, is in violation of the principles of natural justice and statutory provisions? Petitioner's contention: The petitioner argued that the notice dated January 5, 2021, which required a reply by January 22, 2021, provided only 17 days, falling short of the mandatory 30-day period stipulated by Section 73(8) of the Act. This, according to the petitioner, was a gross violation of natural justice and the law, citing a previous judgment of the High Court in CWJC No. 3373/2020. The petitioner also highlighted that Section 74(A) mandates a minimum statutory period of 30 days, which was not afforded. Revenue's contention: The revenue, represented by Mr. Vikash (SC11), did not present any arguments against the petitioner's claim regarding the insufficient notice period. The judgment notes that the revenue did not dispute the facts concerning the notice period.