GST
TRT-2025-
High court of Patna
Date:-12-08-25
In:-
Issue Favourable to Tax Payer ?:-
Order date:12 Aug 2025
Parties: M/s Shivam Enterprise v. State of Bihar & Ors.
Facts -
- The petitioner challenged a demand order of ₹4,53,833/- (tax, interest, and penalty) passed under Section 73 of the BGST/CGST Act, alleging lack of personal hearing, absence of ASMT-10, unsigned notices, and violation of natural justice.
- The Department contended that the petitioner had already admitted in writing that it wrongly availed transitional credit of ₹3,45,120/- under SGST for FY 2017–18. Based on this admission, the Assessing Officer passed an order and raised demand of interest under Section 50(3).
Issue -
- Whether a demand order passed under Section 73 is sustainable when the taxpayer has admitted wrong availment of transitional credit, despite allegations of defective notice and absence of proper hearing?
Order -.
- The division bench of the Hon’ble high court held that since the petitioner’s representative admitted the wrongful availment of ITC, the order could not be faulted merely on technical grounds.
- A mandatory personal hearing under sub-section (4) of Section 75 of the GST Act, 2017 was required to be given to the petitioner if any adverse order was contemplated against him. There is no denial of the fact that pursuant to the show cause notice, the petitioner had submitted a reply through its representative wherein they had accepted availment of input tax credit wrongly.
- Thus, the court held that no penalty is imposed, only interest under Section 50(3). The plea that the representative made a drafting error was raised belatedly in rejoinder and lacked credibility. The Court found no violation of natural justice and dismissed the writ petition.
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