2021 (7) TMI 740 - HC - GST

Violation of principles of natural justice - Summary of Show cause notice in FORM GST DRC-01 passed in violation of procedure as prescribed in Rule 142 of the Central Goods and Service Tax Rules 2017 (CGST Rules, 2017) and Bihar Goods and Service Tax Rules, 2017 - Summary of order in FORM GST DRC-07, issued by respondent, without issuing the order under section 73(9) of the CGST Act, 2017 - learned Government Pleader under instructions fairly states that the authority below i.e. Respondent No. 3 namely the Assistant Commissioner of State Tax, (Patliputra), Pant Bhawan, Bailey Road, Patna, Bihar committed mistake in passing the impugned order - HELD THAT - Well, the stand taken by the officer is quite fair, but we only fail to understand as to why the officer did not apply his mind at the time of passing of the impugned order. It is only when this Court pointed out the difference, wide enough for anyone to notice in imposing the amount of penalty, did the officer realizing his mistake, agreed to rectify the same. We only caution the officer to be careful in future and not commit such mistake again, for such type of mistake not only causes harassment to the parties but also shatters faith of the people in the system. Reliance placed in the case of PINAX STEEL INDUSTRIES PVT. LTD. VERSUS THE STATE OF BIHAR THROUGH THE PRINCIPAL SECRETARY CUM COMMISSIONER, PATNA., THE JOINT COMMISSIONER OF STATE TAXES, DANAPUR CIRCLE, PATNA. DEPARTMENT OF STATE TAXES, 2021 (2) TMI 748 - PATNA HIGH COURT where the order of assessment passed by the Assessing Officer was quashed. The order of assessment passed by the Assessing Officer is set aside - petition disposed off.

Summary

Issues:
Petition for writ of Certiorari, mandamus, and other appropriate relief; Violation of principles of natural justice in issuance of show cause notice, order, and rectification order; Mistake by the Assistant Commissioner of State Tax in passing orders; Reduction of penalty amounts upon review; Comparison with a previous judgment quashing an assessment order.

Analysis:
The petitioner sought various reliefs through the writ petition, including quashing of a show cause notice, order, and rectification order issued by the Assistant Commissioner of State Tax for the period April 2020 to September 2020. The petitioner alleged that these actions were in violation of the Central Goods and Service Tax Rules 2017 and Bihar Goods and Service Tax Rules 2017, and further contended that the orders were issued without following the principles of natural justice. The Government Pleader acknowledged the mistakes made by the Assistant Commissioner in passing the impugned orders and agreed to rectify them. The Court noted the significant reduction in penalty amounts upon review, highlighting the importance of careful consideration by the authorities to avoid causing harassment to parties and undermining public trust in the system.

In a similar case referenced by the Court, an assessment order was quashed, indicating a precedent for addressing errors in tax assessments. In the present case, the Court disposed of the writ petition based on mutually agreeable terms. The impugned orders were quashed, and the Assessing Officer was directed to pass a fresh order in compliance with the relevant tax rules. The petitioner was required to appear before the Assessing Authority, who was instructed to decide the case on its merits while ensuring natural justice principles were followed. The Court emphasized the importance of providing opportunities for parties to present essential documents, avoiding coercive measures during the proceedings, and issuing a speaking order with reasons assigned.

Furthermore, the Court directed the Assessing Authority to expedite the case within a specified timeframe, refund any excess deposits, and de-freeze or de-attach the petitioner's bank accounts if necessary. The judgment preserved the petitioner's right to challenge the order and allowed all parties to seek other remedies available under the law. The Court refrained from expressing any opinion on the merits of the case, leaving all issues open for further consideration. Additionally, the Court encouraged digital proceedings during the pandemic and concluded by disposing of the petition and any related interlocutory applications, with the respondents tasked with communicating the order electronically to the appropriate authority.