Associated Power Structures PVT. LTD. vs. The State Of Bihar

Held

The Court quashed the impugned show cause notice dated 14.02.2021 (Form GST DRC-01), the summary of order dated 23.02.2021 (Form GST DRC-07), and the rectification orders dated 08.04.2021. The Court directed the Assessing Officer to pass a fresh order in compliance with the CGST Rules, 2017 and BGST Rules, 2017. The petitioner undertook to appear before the Assessing Authority on 09.08.2021. The Assessing Authority was directed to decide the case on merits after complying with the principles of natural justice, affording an opportunity of hearing to the parties, and allowing them to place necessary documents. No coercive steps were to be taken against the petitioner during the pendency of the case. The Assessing Authority was to pass a speaking order expeditiously, preferably within two months, and any excess deposit by the petitioner was to be refunded within two months of the order. The Court also directed the de-freezing of the petitioner's bank account(s) immediately. The Court explicitly stated that it had not expressed any opinion on the merits of the case, leaving all issues open.

Facts

The petitioner, Associated Power Structures Pvt. Ltd., filed a writ petition before the Patna High Court challenging a show cause notice and summary of order issued by the Assistant Commissioner of State Tax, Patliputra. The impugned notices pertained to the tax period April 2019 to March 2020. The petitioner sought to quash these notices and prevent coercive measures. During the proceedings, the revenue, through the Government Pleader, fairly conceded that the Assistant Commissioner had made mistakes in issuing the impugned order and the subsequent rectification orders. The Court noted significant discrepancies in the penalty amounts initially imposed and later reduced by the authority.

Key Issues

1. Whether the show cause notice and summary of order issued by the Assistant Commissioner of State Tax, Patliputra, for the period April 2019 to March 2020, are liable to be quashed for procedural irregularities and violation of principles of natural justice, as prescribed under Rule 142 of the CGST Rules, 2017 and BGST Rules, 2017, and Section 73(9) of the CGST Act, 2017? Petitioner's contention: The petitioner argued that the notices and orders were issued in violation of the prescribed procedures and principles of natural justice. They sought a writ of certiorari to quash these documents and a writ of mandamus to stay the proceedings and restrain coercive measures. Revenue's contention: The revenue, through the Government Pleader, fairly conceded that the Assistant Commissioner had committed mistakes in passing the impugned order and the subsequent rectification orders. They acknowledged the discrepancies in the penalty amounts.