Tvl. Popular Mega Motors (India) Private Limited Vs Union of India
Date: February 22, 2024
Subject Matter
Adjudication by the same officer who conducted the inspection violates principles of natural justice
Summary
The case involves a State Tax Officer issuing a show cause notice after an inspection, with the investigating officer also conducting the adjudication, leading to objections from the taxpayer. The Madras High Court ruled that adjudication by the same officer who conducted the inspection violated principles of natural justice. The court directed that assessment proceedings should be conducted by an officer other than the inspecting officer who issued the show cause notice.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
By this writ petition, the petitioner challenges a show cause notice dated 29.01.2024.
2. Pursuant to an inspection under Section 67 of the State Goods and Services Tax Act, 2017, the show cause notice impugned herein came to be issued.
3. Learned counsel for the petitioner assails the show cause notice primarily on the ground that such notice was issued by the officer who undertook inspection under Section 67. By relying on the judgment of the Hon’ble Supreme Court in Ashok Kumar Yadav and others v. State of Haryana and others, (1985) 4 SCC 417, he submits that the Hon’ble Supreme Court concluded that the necessity to ensure that no person should be a judge in his own cause extends to proceedings undertaken by quasi-judicial and even administrative authorities. He also relied upon a Circular dated 09.02.2018 of the Central Board of Excise and Customs in this connection.
4. In response to these contentions, Mr. C. Harsha Raj, learned Additional Government Pleader, has placed on record Circular No.13/2022-TNGST dated 08.11.2022. With reference thereto, he submitted that the inspecting officer is required to issue the show cause notice covering all issues identified for adjudication. If the tax payer declines to pay tax, interest and penalty and contests the demand made in the show cause notice, he states that the Circular envisages that the relevant file be transferred to some other proper officer working under the control of the Joint Commissioner (Intelligence). In the case at hand, he submits that the assessment proceedings pertaining to the petitioner were transferred by the inspecting officer to Mr. Sridharan, Assistant Commissioner.
5. On instructions, learned Additional Government Pleader, further submits that the assessment proceedings of the petitioner for other assessment periods and arising out of inspection were also transferred to the same Assistant Commissioner. This statement is recorded.
6. Learned counsel for the petitioner referred to the show cause notice and raised the objection that such show cause notice provides for a personal hearing before the inspecting officer.
7. Upon considering the above submissions, it is clear that the grievance of the petitioner would stand resolved if the reply of the petitioner is made through the GST portal and such reply is considered and all further proceedings are undertaken by Mr. Sridharan, Assistant Commissioner, or any proper officer other than the inspecting officer.
8. Therefore, W.P.No.4112 of 2024 is disposed of by directing the petitioner to reply to the show cause notice dated 29.01.2024 subject to the condition that the assessment proceedings shall be undertaken only by an officer other than the inspecting officer who issued the impugned show cause notice. The petitioner’s reply to the show cause notice shall be issued within a maximum period of 30 days from the date of receipt of a copy of this order. There will be no order as to costs. Consequently, connected miscellaneous petitions are closed.