M/S Azad Enterprises vs. State Of Bihar

Held

The Court held that the Proper Officer had no authority to assess the tax liability upon the petitioner under Section 73(9) of the GST Act prior to the expiry of the due date for filing the annual return for the financial year 2022-2023, which was 31.12.2023. The assessment order dated 25.11.2023 was passed before this due date. Consequently, the Court set aside the order dated 25.11.2023. The matter was remanded back to the Proper Officer to initiate fresh proceedings for assessment after giving proper notice and an opportunity of hearing to the petitioner. The Court directed the Competent Authority to complete the exercise within three months. The petitioner was also directed to appear before the Proper Officer within two weeks. The issue regarding the notice for attachment of the bank account was not expressly decided.

Facts

M/s Azad Enterprises, the petitioner, filed a writ application challenging an order dated 25.11.2023 passed by the Adjudicating Authority under Section 73(9) of the GST Act, and a notice dated 28.03.2025 for attachment of its bank account. The petitioner contended that it filed monthly and quarterly returns regularly and that the due date for filing the annual return was 31.12.2023. However, the Proper Officer passed the assessment order on 25.11.2023, prior to the due date for filing the annual return. The petitioner subsequently filed its annual return on 20.01.2024. The State conceded that the assessment order was passed before the due date for filing the annual return.

Key Issues

1. Whether the Proper Officer had the authority to assess the tax liability of the petitioner under Section 73(9) of the GST Act prior to the expiry of the due date for filing the annual return for the financial year 2022-2023? Petitioner's contention: The petitioner argued that the assessment order passed on 25.11.2023 was premature as the due date for filing the annual return was 31.12.2023. They submitted that they had filed their annual return on 20.01.2024, and any liability should be limited to late fees. Revenue's contention: The State admitted that the assessment order was passed by the Assessing Authority prior to the due date for filing the annual return by the petitioner.