2021 (7) TMI 741 - 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. Under similar circumstances in Pinax Steel Industries Pvt. Ltd. Vs. The State of Bihar Anr. 2021 (2) TMI 748 - PATNA HIGH COURT , we had quashed the order of assessment passed by the Assessing Officer. The order of assessment passed by the Assessing Officer is set aside - petition disposed off.

Summary

Issues:
1. Writ petition seeking relief against show cause notice and orders issued by Respondent No. 3.
2. Allegations of violation of principles of natural justice in the issuance of orders.
3. Rectification order issued by Respondent No. 3.
4. Mistake admitted by the authority below.
5. Previous judgment quashing an order of assessment.
6. Disposal of the present writ petition and mutually agreeable terms.
7. Directions provided for fresh order and compliance with natural justice principles.
8. Stay on coercive measures during pendency of the case.
9. Timeframe for the fresh order and reasons to be provided.
10. Refund of excess deposit if found.
11. De-freezing/de-attaching of bank accounts.
12. Reservation of liberty to challenge the order.
13. Directions for conducting proceedings through digital mode during the pandemic.
14. Disposal of interlocutory applications.

Analysis:
The petitioner sought relief through a writ petition against a show cause notice and orders issued by Respondent No. 3, Assistant Commissioner of State Tax. The orders were challenged on the grounds of non-compliance with the prescribed procedures under the CGST Rules, 2017 and BGST Rules, 2017, along with allegations of violation of natural justice principles. The Respondent admitted to mistakes in passing the impugned orders, leading to a reduction in the penalty amounts after a review. The Court noted the need for caution by the officer to avoid such errors in the future, emphasizing the impact on parties and public trust in the system.

In a previous judgment, a similar order of assessment was quashed by the Court, setting a precedent for the present case. The Court disposed of the writ petition based on mutually agreeable terms, including quashing the impugned orders and directing the Assessing Officer to pass a fresh order in compliance with GST rules. The petitioner agreed to appear before the Assessing Authority, and both parties were directed to cooperate and provide essential documents during the proceedings.

To ensure fairness, the Court directed no coercive measures to be taken against the petitioner during the case and set a timeframe for the fresh order's completion. The Assessing Authority was instructed to provide a speaking order with reasons and refund any excess deposit found. Additionally, the Court ordered the de-freezing/de-attaching of the petitioner's bank accounts and reserved liberty for parties to challenge the order or seek other remedies as per the law.

Given the current pandemic situation, proceedings were directed to be conducted through digital mode. The Court emphasized that all issues were left open, expressing hope for timely resolution of any further remedies taken by the parties. The writ petition was disposed of, and any interlocutory applications were also addressed. The respondents were tasked with communicating the order to the appropriate authority electronically.