Minimum 30 Days Time To Be Granted To File Reply To GST SCN: Bombay High Court

The Bombay High Court has held that Section 73(8) of the Maharashtra Goods and Service Tax Act (MGST Act) permits a person chargeable with tax for a period of 30 days from the issuance of the show-cause notice to make payment of such tax along with interest payable. If he does not wish to make payment, then within the 30 day period he could file a reply to the show-cause notice.

The division bench of Justice K.R. Shriram and Justice A.S. Doctor has observed that to file a reply to the show-cause notice, the statutory period cannot be arbitrarily reduced to 7 days by the assessing officer.

"These acts/omissions of respondents' officers 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 court said.

The court assumed that petitioners could afford to spend on a lawyer and approach the court, but for every petitioner, at least ten would not be able to afford a lawyer and approach the court and their registrations may get cancelled by the very same officers who have passed such patently illegal orders.

The court directed the department to pay a sum of Rs.10,000 as a donation to the PM Cares Fund.

"A copy of this order be forwarded to the CBIC and to the Chief Commissioner of State Tax, Maharashtra, so that they could at least hold some kind of training and/or orientation session/course, etc. 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," the court ordered.

The court emphasised the necessity that the authorities must be mindful of the grave prejudice that is caused to the assessees on account of patently illegal orders. Authorities must be sensitive to this fact and the impact and consequences that their orders have on the public.

The period of 7 days was given in the notice dated 2nd March 2022 to respond by 9th March 2022, issued to the petitioner, which was contrary to the MGST Rules, 2017.

As per section 73(8) of the MGST Act, a period of 30 days from the issue of a show-cause notice is given to a person chargeable with tax under Section 73 to pay the amount. The show-cause notice should provide a minimum of 30 days to file a reply.

The court held that the order was erroneous because in the show-cause notice only 7 days were given to reply to the notice and on the 8th day the order came to be passed. Therefore, the question of not paying within 30 days of the issue of the notice will not arise.

Case Title: Sheetal Dilip Jain Versus The State of Maharashtra & Ors.

Case No: Writ Petition (L) No. 17591 Of 2022

Citation: 2022 LiveLaw (Bom) 376 

Date: 20.09.2022

Counsel For Petitioner: Advocate Rahul C. Thakar

Counsel For Respondent: AGP Jyoti Chavan

Click Here To Read Order