2022 (6) TMI 1505 - HC - GST

Tax Assessment Order Quashed After Notice Failed to Provide Mandatory 30-Day Response Period Before Ex Parte Proceedings

M/s Gujarat State Fertelizers and Chemicals Limited Versus The Union of India through the Secretary, Department of Revenue, Ministry of Finance, Delhi, The Secretary, Department of Revenue, Ministry of Finance, Delhi, The State of Bihar through the Commissioner cum Secretary, Commercial Tax Department, Govt. of Bihar, The Commissioner cum Secretary, Commercial Tax Department, Govt. of Bihar, The Additional Commissioner State Tax (Appeals), Central Division, The Joint Commissioner of State Tax, Patliputra Circle, Patna and The Assistant Commissioner of State Tax, Patliputra Circle, Patna

The HC quashed an ex parte assessment order imposing a Rs. 59,02,502 liability for FY 2019-20 because statutory requirements were not followed. The ... Challenge to assessment order - ex parte assessment order - refund of pre-deposit - minimium statutory period for making paymet was not provided - violation of principles of natural justice - HELD THAT:- Undisputedly, minimum statutory period of 30 days mandated under the provisions of Section 74(A) of CGST/BGST Act, 2017 was not afforded to the petitioner for making payment due and prior to the expiry of 30 days, the assessing officer proceeded to pass the order, ex parte in nature. The notice dated 14.02.2021 (Annexure-P/5 series) directed the petitioner to file reply on 20th of February, 2021 which was within the period of 30 days. It is the mandate of law that 30 days’ period has to be afforded to the parties, which was not done in the instant case. The notice dated 14.02.2021 as also the order of assessment dated 23.02.2021 quashed with the direction to the assessing officer to issue a fresh notice in the light of the statutory provisions and pass an appropriate order in accordance with law. All proceedings be positively complied with in these matters. Petition allowed. Issues:Challenge to assessment order, demand order, appellate order, coercive action, refund of pre-deposit, fresh assessment order, legality of assessment and appellate orders, entitlement to Input Tax Credit, relief sought, statutory compliance.Analysis:The petitioner sought various reliefs through the writ petition, including quashing the assessment order, demand order, and appellate order for the financial year 2019-20. The assessment order was challenged as being ex parte, imposing a total liability of Rs. 59,02,502. The demand order was issued under specific rules, leading to the imposition of the same total liability. The appellate order affirmed the assessment order, rejecting the petitioner's appeal. Additionally, the petitioner sought a writ to prevent coercive actions, refund of a pre-deposit amount, and a fresh assessment order considering invoices and tax liabilities. The petitioner also claimed entitlement to Input Tax Credit of Rs. 35,70,110.12 for the assessment year 2019-20.The Court noted that the minimum statutory period of 30 days required for payment was not provided to the petitioner before the assessment order was passed ex parte. The notice directing the petitioner to file a reply within a shorter period did not comply with the statutory requirement. Consequently, the Court quashed the notice and assessment order, directing the assessing officer to issue a fresh notice and pass an order in compliance with the law. The Court emphasized the importance of following statutory provisions and ensuring due process in all proceedings.In conclusion, the Court allowed the petition, indicating that the petitioner would cooperate fully. Any interlocutory applications were also disposed of accordingly. The judgment highlights the significance of adherence to statutory timelines and procedural fairness in assessment proceedings. The Court's decision underscores the importance of affording parties their due rights and opportunities for a fair hearing in tax matters.