2021 (9) TMI 823 - HC - GST

Patna HC quashes demand order due to notice discrepancies, emphasizes natural justice principles

M/s Shashikant Singh Versus The Union of India, The Secretary, Department of Revenue, Ministry of Finance, Government of India, The Central Board of Indirect Taxes & Customs, The Chief Commissioner of Central Taxes, The State of Bihar, The Commissioner of State Tax, The Additional Commissioner State Taxes (Appeal), The Assistant Commissioner of State Tax, The State Bank of India

The Patna HC addressed a writ petition challenging demand orders and attachments, focusing on alleged lack of hearing opportunity and improper actions by ... Recovery of amount from the petitioner's Bank Account, after attachment - adequate opportunity of hearing not provided before carrying such option of recovery - HELD THAT:- All the contentions raised by the petitioner in the writ petition is rejected, for the action of the authorities not found to be motivated, malicious or passed for extraneous considerations. In fact, the officers have passed the order protecting not only the interest of the Revenue, but also the assessee, for had it not been so, then the original order dated 19th of March, 2020, (Annexure-P/1 series), whereby the assessment carried out and quantified at ₹ 31,46,273/-, would not have been rectified vide subsequent order dated 1st of March, 2021 (Annexure-R/3), whereby the amount stood reduced to ₹ 13,78,380/-. Undisputedly, the information was not uploaded on the GST Portal (Form DRC 01 and DRC 01A) and the notice cannot be said to have been served upon the petitioner, for copy of the receipt of the Gmail does not indicate the petitioner's name. The original order dated 19th of March, 2020, passed by Respondent No. 8, namely, Assistant Commissioner of State Tax, Patna Central, Patna, in GSTIN-10ACFPS1886H2ZK with respect to the period September 2018, December 2018 and March, 2019 is quashed - petition disposed off. Issues Involved:1. Writ petition for quashing demand orders and attachments2. Non-application of mind by authorities and lack of hearing opportunity3. Quashing of original order due to unserved notices on GST PortalIssue 1: Writ petition for quashing demand orders and attachmentsThe petitioners sought various reliefs through the writ petition, including quashing of demand orders issued for tax periods, issuance of writs for bringing necessary forms on record, and direction to refund recovered amounts. The main contentions raised by the petitioners included alleged lack of hearing opportunity, improper actions by authorities, and challenges to retrospective amendments in tax rules. The court rejected most contentions, except for the issue concerning the absence of an opportunity of hearing before passing the original order dated 19th of March, 2020. The court noted discrepancies in the service of notices through the GST Portal, specifically Form DRC 01 and DRC 01A, which were not properly served on the petitioner. Consequently, the court quashed the original order and directed a fresh assessment with due consideration and compliance with principles of natural justice.Issue 2: Non-application of mind by authorities and lack of hearing opportunityThe court addressed the concerns raised by the petitioners regarding the actions of the authorities, emphasizing that the orders passed were not motivated or malicious. The court highlighted that the authorities acted in the interest of both revenue and the assessee, as evidenced by the rectification of the assessment amount from the original demand to a reduced sum in a subsequent order. However, the court acknowledged the lack of an adequate opportunity of hearing provided to the petitioner before the original order was passed, leading to the decision to quash the said order and initiate a fresh assessment process with proper hearing opportunities.Issue 3: Quashing of original order due to unserved notices on GST PortalThe court's decision to quash the original order dated 19th of March, 2020, was primarily based on the failure to properly serve notices, including Form DRC 01 and DRC 01A, on the petitioner through the GST Portal. The court found that the information was not uploaded correctly, and the notices were not effectively served, as indicated by the absence of the petitioner's name in the receipt of the Gmail. This failure in service led the court to dispose of the petition by quashing the original order and instructing a fresh assessment process with the petitioner's participation and adherence to principles of natural justice.This detailed analysis of the judgment from the Patna High Court highlights the key issues raised in the writ petition, the court's considerations, and the ultimate decision to quash the original order due to procedural irregularities in serving notices on the GST Portal.