M/S Gaya Marketing vs. The State Of Bihar

Held

The Court held that the impugned order was passed in gross violation of the principles of natural justice because no opportunity of hearing was afforded to the writ-petitioner prior to its passing. The Court also found that the order did not assign any reasons whatsoever. 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, affording the petitioner a proper hearing and an opportunity to place additional material on record. The officer was directed to pass a fresh order assigning sufficient reasons in accordance with law. The copy of the fresh order was to be provided to the petitioner. The matter was to be decided within three months, and all issues were left open. The ratio decidendi is that an order passed without affording a hearing and without assigning reasons violates principles of natural justice and is liable to be quashed.

Facts

The petitioner, M/s Gaya Marketing, challenged an order dated 26.09.2018 passed by the Assistant Commissioner of State Taxes, Gaya Circle, and a consequential notice of demand in form DRC-07 dated 03.10.2018. The petitioner contended that the impugned order, which imposed interest under Section 50 of the Bihar Goods and Service Tax Act, 2017, was passed without jurisdiction and in violation of principles of natural justice. Specifically, the petitioner argued that no notice in form GSTR-3A was issued, as mandated by Section 46 of the Act, and that no tax liability was due for the period September 2017 to June 2018, thus no interest could be attracted. The impugned order itself noted that while the return for September 2017 was filed late on 24.08.2018, the interest had not been paid.

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 the statutory provision of Section 46 of the Act, which requires issuance of a notice in form GSTR-3A? 3. Whether liability of interest under Section 50 of the Act can be attracted when no tax liability is due for the period in question? Petitioner's Arguments: The petitioner argued that the impugned order violated principles of natural justice as no opportunity of hearing was provided. They further contended that Section 46 mandates the issuance of a notice in form GSTR-3A, which was not done, and that no tax liability was due for the period September 2017 to June 2018, making the imposition of interest under Section 50 erroneous and without jurisdiction. Revenue's Arguments: The judgment does not record any specific arguments made by the revenue or state respondents.