The Patna High Court (2024) delivered a common judgment in a large batch of GST writ petitions led by CWJC No. 4180 of 2024, addressing three recurring challenges to assessment orders: (i) limitation under Section 73(10) of the GST Act after the pandemic, (ii) the alleged necessity of a pre-notice scrutiny under Section 61/Rule 99 (Form GST ASMT-10), and (iii) violation of the statutory right to a personal hearing under Section 75(4). The Court upheld the validity of limitation extensions triggered by the COVID-19 exclusion period and notifications issued under Section 168A, rejected the argument that every Section 73 proceeding must be preceded by a Section 61 scrutiny notice, but set aside a large number of assessments solely because no personal hearing was afforded despite adverse orders being contemplated.
Simplified Explanation of the Judgment
This judgment resolves multiple writ petitions filed by different registered persons under GST, all challenging assessment orders for FY 2017-18, 2018-19 and 2019-20. The petitioners primarily argued that their assessments were time-barred because the three-year outer limit in Section 73(10) had already expired. They also argued that the department could not issue a Section 73 show cause notice without first issuing a scrutiny notice in Form ASMT-10 under Section 61/Rule 99, and that many assessments were passed without giving them a personal hearing as mandated by Section 75(4).
On limitation, the Court traced how the law evolved during and after the pandemic. Under Section 44, annual returns are ordinarily due by December 31 following the end of each financial year. Section 73(10) fixes the outer limit to pass orders (for non-fraud cases) at three years from that date. During COVID-19, the Supreme Court excluded the period 15.03.2020 to 28.02.2022 for limitation purposes across proceedings. Separately, the Central and State Governments issued notifications under Section 168A extending time limits owing to the pandemic’s impact. The petitioners argued that notifications issued after the pandemic period could not extend limitation, and that the assessments, therefore, were out of time. The Court disagreed. It held that when the Supreme Court’s exclusion window (15.03.2020–28.02.2022) is applied to the statutory three-year cap, the last dates for 2017-18, 2018-19 and 2019-20 assessments are pushed forward to 21.01.2025, 28.02.2025 and 28.02.2025 respectively—none of which had expired when the impugned orders were passed. In other words, the assessments were not time-barred.
To illustrate, for FY 2018-19 the normal three-year limit (counted from the extended due date for annual return) was 31.12.2023. Adding back the Supreme Court’s excluded period moved the last date to 28.02.2025. Similarly, for FY 2019-20, the outer limit shifted from 31.03.2024 to 28.02.2025. Thus, the Court accepted the department’s reliance on the combined effect of the Supreme Court’s orders and the Section 168A notifications. The Court expressly concurred with a Division Bench of the Allahabad High Court in M/s Graziano Trasmissioni, which had upheld similar extensions, and noted that there was no “excessive” extension beyond what the Supreme Court permitted.
On the “mandatory scrutiny” argument, the Court clarified the relationship between Section 61 (scrutiny of returns) and Section 73 (determination of tax for non-fraud cases). Section 73 is a standalone provision: the Proper Officer may directly issue a notice under Section 73 if there appears to be escapement of tax, an erroneous refund, or a wrongful ITC claim. Although scrutiny of returns is a permissible method to flag discrepancies, the statute does not require that every Section 73 action be preceded by a Section 61 notice in Form ASMT-10. Likewise, the Court rejected the contention that a Section 73 notice must always be preceded by ASMT-10; if a Section 73 notice itself is issued, that suffices to commence adjudication.
The most significant relief turned on Section 75(4), which requires that a personal hearing be granted when an adverse decision is contemplated, even if the taxpayer has not specifically asked for it in writing. The Court read Section 75(4) as a clear, mandatory command: once the officer proposes to pass an adverse order and a reply to the show-cause notice exists, a hearing must be offered. Failure to do so violates the statute. Applying this rule, the Court set aside assessment orders in a large cluster of petitions where no personal hearing was provided and remanded those matters for fresh orders after granting one hearing (with one possible adjournment) to be completed within three months or within the still-running limitation period, whichever is later.
However, in four petitions where the record showed that a personal hearing had in fact been granted (CWJC Nos. 4505/2024, 9453/2024, 10182/2024, and 11511/2024), the Court declined to interfere and dismissed the writ petitions. Finally, the Court recorded that, save for the remand on the limited ground of hearing, all other legal challenges failed. The judgment is authored by the Hon’ble Chief Justice, with a concurring opinion by the companion Judge.
In short, the Court’s approach balances two principles: it preserves the pandemic-driven limitation extensions so that adjudication is not time-barred, and it enforces the taxpayer’s statutory right to be heard before an adverse order is issued. For many assessees, this means a fresh opportunity to present their case on merits; for the department, it confirms that the limitation period remains validly extended into early 2025 for the relevant years.
Significance or Implication of the Judgment (For general public or government)
• For taxpayers (businesses and professionals): The ruling confirms that assessment orders for FY 2017-18 to 2019-20 are not automatically time-barred; officers may proceed up to the extended dates calculated with the Supreme Court’s excluded period. At the same time, any adverse order must be preceded by a meaningful personal hearing under Section 75(4). If you received an order without a hearing, you have a strong ground for remand.
• For tax administration: The Court validates reliance on Section 168A notifications read with the Supreme Court’s COVID-19 exclusion, avoiding a flood of time-bar challenges. But it also puts officers on notice: ensure that a notice of personal hearing is issued and an opportunity is actually afforded where an adverse decision is contemplated.
• For litigation strategy: Arguments that every Section 73 proceeding must be preceded by Section 61 scrutiny are unlikely to succeed. Focus should shift to substantive merits, quality of show-cause notices, and strict compliance with Section 75(4).
Legal Issue(s) Decided and the Court’s Decision with reasoning
• Whether limitation under Section 73(10) had expired for FY 2017-18, 2018-19, 2019-20
— Decision: No. Applying the Supreme Court’s exclusion of 15.03.2020–28.02.2022, the last dates stood extended to 21.01.2025 (FY 2017-18) and 28.02.2025 (FY 2018-19 and 2019-20). Hence, the impugned orders fell within limitation.
• Whether Section 73 action must be preceded by scrutiny under Section 61/Rule 99 (ASMT-10)
— Decision: No. Section 73 is a standalone adjudicatory route and does not require a prior ASMT-10 in every case.
• Whether a personal hearing is mandatory even if not requested, when an adverse decision is contemplated
— Decision: Yes. Section 75(4) imposes a statutory mandate to grant a personal hearing once an adverse order is proposed and a reply exists; failure vitiates the order.
• Appropriate relief where no personal hearing was granted
— Decision: Assessment orders in numerous writ petitions were set aside and matters remanded to the Assessing Officers to issue a notice of personal hearing, hear the assessee (one adjournment possible), and pass fresh orders within three months or within the subsisting limitation—whichever is later. Other grounds were rejected.
• Cases where a hearing had been granted
— Decision: Writ petitions in CWJC Nos. 4505/2024, 9453/2024, 10182/2024 and 11511/2024 were dismissed.
Judgments Referred by Parties
• Re: Cognizance for Extension of Limitation, Supreme Court of India (orders excluding 15.03.2020 to 28.02.2022 period).
• M/s Graziano Trasmissioni v. Goods and Services Tax & Ors., Allahabad High Court, Writ Tax No. 1256 of 2023 (upholding limitation extensions via GST notifications).
Judgments Relied Upon or Cited by Court
• Re: Cognizance for Extension of Limitation — applied to compute the extended last dates for FY 2017-18 to 2019-20.
• M/s Graziano Trasmissioni (Allahabad High Court) — respectfully concurred with, to uphold validity of the extended limitation.
Case Title
CWJC No. 4180 of 2024 & batch — challenges to GST assessment orders for FY 2017-18, 2018-19, 2019-20 (Petitioners v. State Tax/CGST authorities)
Case Number
Civil Writ Jurisdiction Case No. 4180 of 2024 (lead matter) with connected cases as recorded in the judgment.
Coram and Names of Judges
Hon’ble Mr. Chief Justice K. Vinod Chandran; Hon’ble Mr. Justice Partha Sarthy.
Names of Advocates and who they appeared for
• For various petitioners in the batch: Mr. D.V. Pathy; Dr. Avinash Poddar; Mr. Bijay (Bijoy) Kumar Gupta; Mr. Sadashiv Tiwari; and other counsel as recorded.
• For the State/Union/Departmental respondents: Hon’ble Advocate General Mr. P.K. Shahi (State); Dr. K.N. Singh, Additional Solicitor General (Union); Mr. Anshuman Singh, Sr. SC, CGST & CX; with supporting counsel; Standing Counsel for State Tax.
Link to Judgment
MTUjNDE4MCMyMDI0IzEjTg==—ak1–jtOnnSqVLw=
If you found this explanation helpful and wish to stay informed about how legal developments may affect your rights in Bihar, you may consider following Samvida Law Associates for more updates.
