Facts
The petitioner, a proprietary concern, challenged an ex parte assessment order dated 24.04.2024 passed under Section 73 of the Bihar Goods and Services Tax (BGST) Act, 2017, for the Financial Year 2018-19
Source reference: p. 1-2Following a show-cause notice dated 25.10.2023, the Department issued two reminders for hearings on 08.12.2023 and 09.04.2024
Source reference: p. 3The petitioner submitted a formal response on 10.04.2024 via Form GST DRC-06, specifically requesting a personal hearing under serial no. 7
Source reference: p. 4Notwithstanding this request, the Deputy Commissioner issued the final order on 24.04.2024, creating a total tax, interest, and penalty liability of Rs. 26,08,987/- without conducting a personal hearing
Source reference: p. 4Issues
1. Whether the failure of the proper officer to grant a personal hearing, despite a written request by the assessee in their reply, constitutes a violation of the principles of natural justice and statutory mandates
Source reference: p. 72. Whether the assessment order is sustainable under Section 75 of the BGST Act when the maximum statutory limit of three adjournments had not been reached
Source reference: p. 4, 6Law Applied
Section 75(4) of the BGST Act, 2017, which mandates that an opportunity for hearing shall be granted whenever a request is received in writing from the person chargeable with tax or where an adverse decision is contemplated
Source reference: p. 5Section 75(5), which empowers the proper officer to grant up to three adjournments upon sufficient cause
Source reference: p. 4The overarching principle applied is that statutory procedural safeguards regarding natural justice must be strictly followed before imposing tax liabilities
Source reference: p. 7Reasoning
The Court observed that while the petitioner had been issued two reminders, Section 75(5) allows for up to three adjournments, suggesting the authorities were too hasty
Source reference: p. 6The Court found that the petitioner had explicitly opted for a personal hearing in his DRC-06 reply filed on 10.04.2024
Source reference: p. 6By ignoring this written request and proceeding to pass the impugned order on 24.04.2024, the proper officer breached the mandatory requirement of Section 75(4)
Source reference: p. 7The Court reasoned that since an "adverse decision" (a tax demand) was contemplated, the right to a hearing was not discretionary but a statutory obligation. The omission to provide this forum resulted in a miscarriage of justice
Source reference: p. 7Holding
The Court answered the issues in the affirmative, holding that the denial of a personal hearing violated Section 75(4) of the BGST Act
The High Court quashed the assessment order dated 24.04.2024 and remanded the matter back to the Deputy Commissioner
Source reference: p. 7The Court fixed a specific date for a personal hearing (05.05.2026 at 12:35 PM), directing the petitioner to appear and submit arguments, with the caveat that failure to appear would result in the automatic revival of the original demand and liability
Source reference: p. 7-8Original Court PDF
M/s. Shyam ElectricvsThe Union of India
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