M/S Gaya Marketing vs. The State Of Bihar

Held

The Court held that the impugned order was passed without assigning any reasons and without affording the petitioner an opportunity of hearing, constituting a gross violation of the principles of natural justice. Consequently, the impugned order was quashed. The Court directed the petitioner to appear before the appropriate authority on 28.01.2020, where proceedings would commence afresh, with a proper opportunity for hearing and to place additional material. The authority was instructed to pass a fresh order assigning sufficient reasons in accordance with the law. The copy of the fresh order was to be provided to the petitioner, and if aggrieved, the petitioner could assail it further. The petitioner was directed to cooperate fully and not seek adjournments, with the matter to be decided within three months. All issues were left open for reconsideration.

Facts

The petitioner, M/s Gaya Marketing, a proprietorship concern, challenged an order dated 26.09.2018 and a subsequent demand notice dated 03.10.2018, both issued by the Assistant Commissioner of State Taxes, Gaya Circle. The impugned order imposed interest under Section 50(1) of the Bihar Goods and Service Tax Act, 2017, for delayed filing of returns for the period of October 2017 to June 2018. The petitioner contended that no tax liability was due for the period in question, and therefore, no interest could be attracted. The petitioner also argued that the order was passed without jurisdiction, in violation of statutory provisions, and without affording an opportunity of hearing, thus violating the principles of natural justice.

Key Issues

1. Whether the impugned order dated 26.09.2018, passed by the Assistant Commissioner of State Taxes, Gaya Circle, is illegal and without jurisdiction in terms of Sections 39, 46, 47, and 50 of the Bihar Goods and Service Tax Act, 2017? 2. Whether the impugned order and the consequential notice of demand suffer from a violation of the principles of natural justice and statutory provisions, specifically Section 46 of the Act, which mandates issuing a notice in form GSTR-3A for filing returns within 15 days? 3. Whether any liability of interest under Section 50 of the Act could be attracted when no tax liability is due for the period September 2017 to June 2018? Petitioner's Arguments: The petitioner argued that the order was passed without jurisdiction and in violation of the principles of natural justice. They contended that Section 46 of the Act required the respondent to issue a notice in form GSTR-3A, giving 15 days to file returns, before taking any action. Furthermore, the petitioner asserted that no interest liability under Section 50 could arise as there was no admitted tax or demand of tax due for the period in question. Revenue's Arguments: The judgment does not record any specific arguments made by the revenue or state respondents.