2020 (7) TMI 508 - HC - GST

Principles of Natural Justice - Adjudication of matter before the Date specified in the notice - Section 61 of the Central/Bihar Goods and Services Tax Act, 2017 - HELD THAT - It is not disputed that one of the impugned orders stands passed in violation of principles of natural justice. Impugned order dated 2nd of March, 2020 is passed by the Deputy Commissioner of State Tax, Patna Central Circle, Bihar, Patna who issued a notice asking the petitioner to show cause by a particular date. However, for unexplained reasons and circumstances, without any prior intimation or knowledge, the matter was preponed and without affording any opportunity of hearing, decided, holding the view of the revenue. The order does entail civil and pecuniary consequences, causing prejudice to the petitioner. On all fours, principles of natural justice stand violated. The impugned order dated 02.03.2020 and the resultant order dated 04.03.2020 passed by the Deputy Commissioner of State Tax, Patna Central Circle, Bihar, Patna are quashed and set aside with the matter remanded back to the authority for consideration afresh - Petition allowed by way of remand.

Summary

Issues: Violation of principles of natural justice in passing orders under Section 74(1) and Section 74(9) of the Bihar Goods and Services Tax Act, 2017; Jurisdictional errors in issuing orders; Compliance with mandatory provisions under Section 61 of the Act

Analysis:
1. The petitioner sought relief against the order dated 31.01.2020 passed by the Deputy Commissioner of State Tax, Patna Central Circle, Bihar, under Section 74(1) of the Bihar Goods and Services Tax Act, 2017. The petitioner contended that the order was issued without complying with the mandatory provision of Section 61 of the Act. Additionally, the petitioner raised concerns regarding the timing of the show cause notice, which was served during a national holiday, making it impossible to file a reply within the given timeframe. The petitioner argued that the order was bad in law due to these procedural irregularities.

2. Another order dated 02.03.2020 was challenged by the petitioner, issued under Section 74(9) of the Central Goods and Services Act, 2017. The petitioner alleged a violation of natural justice principles as the final order was passed before the deadline for submitting a reply mentioned in the show cause notice. The petitioner contended that this premature decision-making deprived them of a fair hearing. Moreover, similar to the earlier order, jurisdictional errors were highlighted, emphasizing non-compliance with Section 61 of the Central/Bihar Goods and Services Tax Act, 2017.

3. The third relief sought by the petitioner was against the consequential DRC-07 dated 04.03.2020, directing the petitioner to deposit a specified amount by a certain date, failing which recovery proceedings would be initiated. The petitioner argued that this order was linked to the previous orders and should be set aside along with them.

4. The court acknowledged the violation of principles of natural justice in passing the impugned orders. The order dated 2nd of March, 2020 was found to have been issued without affording the petitioner an opportunity to be heard, contrary to the principles of natural justice. As a result, the court quashed the orders dated 02.03.2020 and 04.03.2020, remanding the matter back to the authority for reconsideration after ensuring compliance with the principles of natural justice. The petitioner was directed to appear before the authority on a specified date for a fresh decision to be made in accordance with the law.

In conclusion, the writ petition was allowed based on the violation of natural justice principles, leading to the setting aside of the impugned orders and a remand for fresh consideration by the authority with proper adherence to procedural requirements and principles of natural justice.