2021 (3) TMI 369 - HC - GST

Principles of Natural Justice - ex-parte order - validity of statutory return in form GSTR 3B - primacy over the figures determined by the respondent number 4 in terms of the best judgment assessment made under Section 62(1) of the Goods And Services Tax Act 2017 - permission of filing of a monthly return after due date - nature of jurisdiction conferred under Section 62(1) of the act to make a best judgment assessment of an assessee having defaulted in filing a monthly return - declaration sought that Section 62(2) of the act is directory and not mandatory. HELD THAT - The impugned order dated 14.09.2019 passed by the Respondent No. 3 the Assistant Commissioner of Sate Taxes Bhagalpur Circle Bhagalpur needs to be quashed and set aside for the same to have been passed without following the principles of natural justice. In terms of the impugned order financial liability stands fastened. Thus it entails civil consequences seriously prejudicing the petitioner inasmuch as without affording any adequate opportunity of hearing or assigning any reason. Petitioner states that without prejudice to the respective rights and contentions of the parties petitioner is ready and willing to deposit a sum of 1, 50, 000/- with the appropriate authority on or before 09.03.2021 - The petitioner shall deposit a sum of 1, 50, 000/- with the authority on or before 09.03.2021 - the petitioner shall appear before the authority on 09.03.2021 in his office at 10 30 A.M. on which date he shall place on record additional material if so required and desired. Petition disposed off.

Issues:
1. Validity of ex parte assessment order dated 14.09.2019
2. Primacy of statutory return over best judgment assessment
3. Permissibility of filing monthly return after due date
4. Nature of jurisdiction under Section 62(1) of the Goods and Services Tax Act, 2017
5. Interpretation of Section 62(2) of the act
6. Violation of principles of natural justice in passing the order

Analysis:

1. The petitioner sought relief for quashing an ex parte assessment order dated 14.09.2019. The High Court found that the order was passed without following the principles of natural justice, violating the petitioner's rights. The financial liability imposed by the order prejudiced the petitioner without adequate opportunity for hearing or reasoning. The Court quashed the impugned order due to the violation of natural justice principles.

2. The petitioner also requested a declaration that their statutory return in form GSTR 3B for June 2019 is valid and holds primacy over the figures determined by the assessing authority through best judgment assessment under Section 62(1) of the act. The Court acknowledged the petitioner's contentions and emphasized the importance of natural justice in such assessments, directing the authority to consider the return filed by the petitioner after due compliance with the law.

3. The issue of permissibility of filing a monthly return after the due date under Section 16(2), 16(4), 39, 46, and 47 of the act was raised. The Court held that these sections permit filing a return after the due date and impart validity to such returns as long as they comply with the law. The Court emphasized the importance of due process and compliance with statutory provisions.

4. Regarding the nature of jurisdiction under Section 62(1) of the act for best judgment assessment, the Court clarified that it is not penal but a discretionary power to fill gaps in records. The Court emphasized that once a valid return is filed by the assessee, even after the due date but in compliance with the law, the best judgment assessment must be recalled and the filed return considered by the assessing authority.

5. The Court interpreted Section 62(2) of the act, stating that it is directory and not mandatory. Any return filed in compliance with the relevant sections of the act should replace the best judgment assessment made under Section 62(1), regardless of the limitation prescribed under Section 62(2). The Court highlighted the importance of adherence to statutory provisions.

6. Lastly, the Court addressed the violation of principles of natural justice in passing the order dated 14.09.2019. The Court emphasized the need for fair procedures and opportunities for hearing before imposing financial liabilities on parties. The Court quashed the order and provided directions for a fresh consideration of the matter in compliance with natural justice principles, emphasizing cooperation and timely resolution.

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