Simplified Explanation of the Judgment
In a recent case, the Patna High Court delivered a significant judgment regarding assessment orders under the Goods and Services Tax (GST) regime. The petitioner, a proprietorship firm engaged in trade, had approached the court challenging assessment orders passed by the State Tax authorities. The petitioner’s main grievance was that these orders were issued without granting him an opportunity for a personal hearing, as mandated under Section 75(4) of the Central GST Act.
Section 75(4) explicitly provides that an opportunity of hearing must be given before passing an adverse decision, especially if requested by the assessee or if adverse implications are expected. The petitioner argued that despite this legal provision, the assessing officer issued two orders—dated 30.09.2023 and 27.11.2023—without giving the petitioner a chance to explain their position in person.
The High Court observed that this issue of denial of personal hearing had already been dealt with in a similar matter—C.W.J.C. No. 4180 of 2024 (M/s Barhonia Engicon Pvt. Ltd. vs. State of Bihar)—decided on 27.11.2024. In that case too, the court ruled that passing assessment orders without personal hearing violates the statutory mandate and principles of natural justice.
Aligning with that precedent, the Patna High Court set aside the impugned assessment orders against the petitioner. However, the court did not quash the proceedings entirely. Instead, it remitted the matter back to the Assessing Officer with specific directions.
The court directed that the petitioner (assessee) must appear before the Assessing Officer on 27.01.2025 or on a date to which the hearing may be adjourned once. The Assessing Officer was instructed to complete the proceedings within three months from the date of the judgment (09.01.2025) or within the applicable limitation period, whichever is later.
This decision reinforces the importance of adhering to procedural safeguards under tax laws, especially when the outcome may adversely affect a taxpayer’s financial and legal interests.
Significance or Implication of the Judgment
This judgment is particularly important for both taxpayers and tax authorities. For taxpayers, it underlines their right to a personal hearing during GST assessments—an essential safeguard against arbitrary decisions. For the government and tax departments, it serves as a reminder to strictly follow due process, as non-compliance may result in avoidable litigation and nullification of orders.
The decision sets a precedent for similar disputes, strengthening procedural fairness in the GST regime. It also promotes transparency and accountability in tax assessments, thereby building taxpayer confidence in the legal system.
Legal Issue(s) Decided and the Court’s Decision with reasoning
- Whether assessment orders passed without personal hearing under Section 75(4) of the GST Act are valid?
- Court’s Decision: No. The Patna High Court ruled that issuing assessment orders without granting a personal hearing violates Section 75(4) of the GST Act.
- Whether such an error mandates setting aside the order entirely or remanding for fresh proceedings?
- Court’s Decision: The court set aside the impugned orders and remitted the matter back to the Assessing Officer for a fresh hearing and order.
- Timeframe for reassessment after remand?
- Court’s Decision: The reassessment must be completed within three months from the judgment date or within the statutory limitation period, whichever is later.
Judgments Relied Upon or Cited by Court
- M/s Barhonia Engicon Pvt. Ltd. v. State of Bihar & Ors., C.W.J.C. No. 4180 of 2024, decided on 27.11.2024.
Case Title
M/s Singh Traders v. State of Bihar & Others
Case Number
Civil Writ Jurisdiction Case No. 18648 of 2024
Coram and Names of Judges
Hon’ble the Chief Justice K. Vinod Chandran
Hon’ble Mr. Justice Partha Sarthy
Names of Advocates and who they appeared for
- Mr. Rudra Pratap Singh, Advocate (for the petitioner)
- Mr. Akshansh Ankit, Advocate (for the petitioner)
- Mr. Government Pleader 7 (for the respondents)
Link to Judgment
bb367a30-c7d7-4e22-bd8c-164f0c0fe944.pdf
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