In a significant ruling to provide relief to the taxpayers, a division bench of the Bombay High Court has held that a GST order passed by tax authorities, which granted only seven days to file a reply to a show-cause notice is “patently illegal” and the High Court also asked the tax authorities to donate Rs10,000 to the PM CARES Fund.
“The order was erroneous because, in the SCN, only seven days were given to reply to the notice, and on the eighth day, the order came to be passed. Therefore, the question of not paying (the tax along with interest) within 30 days of the issue of the notice will not arise.” The Court said.
Slamming the action of the while passing orders contrary to the basic provisions of the goods and service tax (GST) law without application of mind, the Court stated that such acts are adding to the already overburdened dockets of the court.
“Valuable judicial time is wasted because such unacceptable orders are being passed by respondents’ officers. The officers do not seem to understand or appreciate the hardship that is caused to the general public,” the bench said.
The bench comprising Justice KR Shriram and Justice AS Doctor also held that as per Section 73(8) of the Maharashtra GST (MGST) Act, there is a time limit of 30 days from the issuance to file a reply, in case the taxpayer does not wish to make payment, on an SCN. “This statutory period cannot be arbitrarily reduced to seven days by the assessing officer.”
The Court has also asked copy of its order to be forwarded to the central board of indirect taxes & customs (CBIC) and to the chief commissioner of state tax in Maharashtra, so that they could at least hold some kind of training or orientation session and course to apprise and educate its officers on the prevailing law and rules framed thereunder and also explain to them what ‘principles of natural justice’ mean.
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