M/S Gaya Marketing vs. The State Of Bihar

Held

The Court held that the impugned order dated 26.09.2018 was passed without assigning any reasons whatsoever and that no opportunity of hearing was afforded to the petitioner prior to its passing. This constituted 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 the petitioner being afforded a proper opportunity of hearing and the chance to submit additional material. The authority was directed 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 the matter was to be decided within three months. All issues were left open for reconsideration. The ratio decidendi is that orders passed without reasons and without affording an opportunity of hearing violate principles of natural justice and are 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 demand notice dated 05.10.2018. The petitioner sought to quash these orders, arguing they were illegal, without jurisdiction, and violated principles of natural justice and statutory provisions. Specifically, the petitioner contended that no notice in Form GSTR-3A was issued as required by Section 46 of the Bihar Goods and Service Tax Act, 2017, and that no tax liability was due for the period September 2017 to June 2018, thus no interest under Section 50 should be attracted. The impugned order itself, reproduced in the judgment, indicated that interest was levied under Section 50 of the BGST Act, 2017, for delayed filing of returns for March 2018, with a total interest amount of ₹100017.88.

Key Issues

1. Whether the impugned order dated 26.09.2018 and the consequential demand notice dated 05.10.2018, issued by the Assistant Commissioner of State Taxes, are illegal and without jurisdiction, violating Sections 39, 46, 47, and 50 of the Bihar Goods and Service Tax Act, 2017? The petitioner argued that the order violated principles of natural justice and statutory provisions, specifically Section 46, which mandates the issuance of a notice in Form GSTR-3A seeking filing of returns within 15 days before taking any action. The petitioner also contended that no tax liability was due for the period in question (September 2017 to June 2018), rendering the imposition of interest under Section 50 erroneous and indicative of a jurisdictional error. The revenue did not record any specific arguments against these points in the judgment.