2020 (10) TMI 45 - HC - GST

Violation of principles of natural justice - Difference in the turnover as reported in GSTR-3B and as per TDS Return GSTR 2A - Suppression of facts (turnover) or not - HELD THAT - 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, decide, 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 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 involved:
1. Setting aside the order dated 31.01.2020 passed by the Deputy Commissioner of State Tax, Patna Central Circle under Section 74(1) of the Bihar Goods and Services Tax Act, 2017.
2. Setting aside the order dated 02.03.2020 issued by the Deputy Commissioner, State Tax, Patna Central Circle Patna under Section 74 (9) of the Central Goods and Services Tax Act, 2017.
3. Setting aside the consequential DRC-07 dated 04.03.2020 issued by the office of the Deputy Commissioner of State Tax, Patna Central Circle, Bihar.
4. Remanding the matter back to the respondent's authorities with a direction to comply with the mandatory requirements under Section 61 of the Central / Bihar Goods and Service Tax Act, 2017.

Analysis:

1. The petitioner sought relief to set aside the order dated 31.01.2020 passed by the Deputy Commissioner of State Tax, Patna Central Circle under Section 74(1) of the Bihar Goods and Services Tax Act, 2017. The petitioner argued that the order was issued without complying with the mandatory provision of Section 61 of the Act. Additionally, the petitioner contended that the show cause notice was served at a difficult time, making it impossible to file a timely reply. The High Court found merit in the petitioner's arguments and declared the order as completely without jurisdiction and bad in law. The Court emphasized that the order lacked compliance with essential legal provisions, leading to its setting aside.

2. The petitioner also challenged the order dated 02.03.2020 issued by the Deputy Commissioner, State Tax, Patna Central Circle Patna under Section 74 (9) of the Central Goods and Services Tax Act, 2017. The petitioner highlighted that the final order was passed before the deadline provided for submitting a reply, violating the principles of natural justice. The Court agreed with the petitioner's contention, noting that the order was passed without affording an opportunity for a hearing, which is essential under principles of natural justice. Consequently, the Court quashed and set aside the impugned orders, directing a fresh consideration by the authority after complying with the principles of natural justice.

3. Another issue raised was regarding the consequential DRC-07 dated 04.03.2020, issued by the office of the Deputy Commissioner of State Tax, Patna Central Circle, Bihar. The petitioner was directed to deposit a specific amount failing which recovery proceedings would be initiated. However, the Court, after setting aside the previous orders, nullified this consequential order as well. The Court's decision to remand the matter back to the authority for fresh consideration also encompassed this consequential order, ensuring a comprehensive review of the entire case.

4. The petitioner further prayed for the matter to be remanded back to the respondent's authorities with a specific direction to comply with the mandatory requirements under Section 61 of the Central / Bihar Goods and Service Tax Act, 2017. The Court acknowledged the petitioner's plea and directed the petitioner to appear before the authority for a fresh decision on a specified date. By allowing the writ petition and providing detailed observations and directions, the Court ensured that all issues, including those raised in the petition, would be considered by the authority with due regard to principles of natural justice.