Simplified Explanation of the Judgment
In a recent decision, the Patna High Court addressed a dispute concerning a private consultancy firm that had challenged two orders passed under the Goods and Services Tax (GST) framework. The petitioner contested the rejection of its appeal on grounds of delay and the validity of an ex parte assessment order passed without proper hearing.
The petitioner’s main grievance stemmed from a GST assessment order dated 31 August 2019. This order was issued under Section 62(1) of the GST Act due to delayed filing of returns for June 2019. The petitioner filed the required return with just a three-day delay. However, the assessing officer ignored this submission and proceeded with a best judgment assessment, imposing a financial liability.
Later, the petitioner became aware of the assessment order and filed an appeal on 23 June 2020. The appellate authority rejected the appeal citing a delay in filing, as per the strict timelines under Section 107 of the GST Act. The petitioner argued that the delay was caused due to the pandemic and that the limitation should have been relaxed under Section 5 of the Limitation Act, 1963, especially in light of the Supreme Court’s suo motu directions extending limitation periods due to Covid-19.
The High Court agreed with the petitioner on both counts. Firstly, the Court found that the delay in appeal filing was justifiable given the exceptional circumstances of the Covid-19 pandemic. Secondly, it held that the original assessment order was issued without providing the petitioner an adequate opportunity to be heard — a clear violation of the principles of natural justice.
Accordingly, the High Court quashed both the appellate rejection and the assessment order. It remanded the matter back for fresh consideration, giving clear directions on how the case should proceed, including timelines and conditions for compliance.
Significance or Implication of the Judgment
This judgment emphasizes the importance of procedural fairness in GST proceedings. It reinforces that even in regulatory assessments, the principles of natural justice — especially the right to be heard — must be followed. The case also highlights how courts are accommodating delays caused by the Covid-19 pandemic, in line with directions from the Supreme Court.
The decision brings relief to businesses facing ex parte assessments due to minor delays or procedural lapses. It confirms that appellate authorities cannot rigidly apply limitation periods when higher judicial orders provide flexibility. Government officials are also reminded to ensure procedural propriety before enforcing tax liabilities.
Legal Issue(s) Decided and the Court’s Decision
- Whether the appellate authority could reject an appeal filed with delay due to Covid-19:
✅ No. The High Court held that the delay was condonable in light of the Supreme Court’s order in Suo Motu Writ (Civil) No. 3 of 2020. - Whether an assessment order passed without hearing the petitioner is valid:
✅ No. The Court found that the order violated the principles of natural justice and thus quashed it. - Whether a best judgment assessment can override a delayed but valid return:
✅ No. The Court noted that returns filed, even with slight delay, should be considered over arbitrary best judgment assessments. - Whether Section 62(2) of GST Act is mandatory or directory:
✅ While not conclusively ruled upon, the Court leaned toward interpreting the provision in a way that supports natural justice and fairness.
Judgments Relied Upon or Cited by Court
- Suo Motu Writ (Civil) No. 3 of 2020 (Re: Cognizance for Extension of Limitation), Hon’ble Supreme Court of India.
Case Title
Bihar Risk Management Consultancy Pvt. Ltd. vs. State of Bihar & Others
Case Number
Civil Writ Jurisdiction Case No. 2097 of 2021
Citation(s)– 2021(2) PLJR 135
Coram and Names of Judges
Hon’ble the Chief Justice Sanjay Karol
Hon’ble Mr. Justice S. Kumar
Names of Advocates and who they appeared for
Mr. Gautam Kumar Kejriwal – for the Petitioner
Mr. Lalit Kishore, Advocate General, and Mr. Vikash Kumar – for the Respondents
Link to Judgment
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