27.12.2022: Ex-parte Order Passed Without Providing Thirty Days’ Time As Prescribed Under Section 73(8) Is Not Legal – Patna High Court

The Hon’ble High Court of Patna vide its order dated 09.12.2022, in the matter of M/s Motiprabha Infratech Pvt. Ltd. Vs. Union Of India & Others in Civil Writ Jurisdiction Case No. 16751 of 2022, set aside the ex-parte assessment order passed & the notice issued without providing thirty days’ time for making payment as stated in Section 73(8) of the CGST Act, 2017.

The petitioner filed the writ petition before the Hon’ble High Court praying for setting aside the ex-parte assessment order dated 24.02.2021 issued in form DRC – 07 by Respondent Authority for the F.Y. 2020-21 for being passed in violation of Section 73(8) of the Act and whereby, total liability of Rs. 9,85,119- (with breakup as – (a) IGST worth Rs.7,72,525/- with interest Rs.39,398/- (b) CGST worth Rs.80,556/-with interest Rs.6,041/- and SGST worth Rs.80.556/- with interest Rs.6,041/-) has been imposed on the petitioner. It was prayed to declare the impugned assessment order dated 24.02.2021 and the summary in DRC-07 are bad in law as the both have been issued without providing 30 days’ time for payment as stated in Section 73(8) and the impugned order has been passed merely after 9 days of impugned notice. Further, it was prayed to quash the Appellate order dated 28.09.2022 and APL-02 bearing No. ZD100922022326W dated 30.09.2022 rejecting the appeal of the petitioner for delay of 17 days.  It was also prayed to direct the respondents not to take any coercive action including recovery from bank account during the pendency of the writ as well as to refund the amount deposited as ten percent of the disputed tax in terms of Section 107(6)(b) of the CGST Act, for the purpose of filing the appeal.  Lastly, it was prayed to hold the act of the Respondent Authority was illegal as the opportunity of hearing was not granted and the tax liability was enhanced to 6 times on the basis of amount credit in GSTR-7 i.e., TDS certificate issued by the customer.

Held: –

  • The Hon’ble Court after considering the submissions made and facts of the case, found that there is no dispute that minimum statutory period of 30 days mandated under the provisions of Section 73(8) of the CGST/BGST Act, 2017 was not provided to the petitioner for making the payment, and prior to the expiry of 30 days, the impugned order was passed ex-parte.
  • It was found by the Hon’ble Court that in the present matter notice dated 15.02.2021 directed the petitioner to file reply on 21.02.2021, and the said date fell within 30 days from the issuance of notice. It is the mandate of law that 30 days’ time has to be given to the parties, however, in the instant matter it was not done.

The Hon’ble High Court with the above findings, allowed the writ petition by quashing the notice dated 15.02.2021 as well as the order of assessment dated 24.02.2021, with the direction to the assessing officer to issue fresh notice in the light of the statutory provisions and pass an appropriate order in accordance with law.

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