Hitachi Systems India Private Limited Vs Union of India
Date: April 1, 2024
Subject Matter
Taxpayer to be granted document presentation opportunity subject to the condition that he remits 10% of the disputed tax demand
Summary
The case law involves a petitioner contesting an assessment order on the grounds that they were not provided a reasonable opportunity to contest the tax demand. The petitioner responded to intimation and show cause notice, highlighting specific defects in the order. However, the impugned order was issued without providing a reasonable opportunity for the petitioner to respond to the defects by submitting relevant documents. The court set aside the impugned order, remanding the matter for reconsideration subject to the condition that the petitioner remits 10% of the disputed tax demand and provides additional documents within a specific timeframe.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
An assessment order dated 20.12.2023 is assailed on the ground that the petitioner was not provided a reasonable opportunity to contest the tax demand.
2. The petitioner received an intimation on 23.01.2023 with regard to about 12 alleged defects. Such intimation was replied to on 02.2023. Thereafter, a show cause notice was issued on 07.03.2023 and replied to on 13.03.2023. The impugned order was issued in the above facts and circumstances on 20.12.2023.
3. Learned counsel for the petitioner focused on the discussion in the impugned order relating to defect no.12 and defect no.2. With regard to defect no.12, learned counsel pointed out that the petitioner had replied to the show cause notice and stated that the petitioner is unable to understand as to where the amounts specified in the show cause notice were taken from. He further submits that without clarifying this aspect, the demand was confirmed. As regards defect no.2, learned counsel points out that the petitioner had produced invoices to establish that the sales were zero-rated sales. He further submits that if the SEZ sale agreement copy and other documents had been requested for, the petitioner would have produced the same. By further submitting that the impugned order contains infirmities with regard to other defects also, learned counsel submits that the petitioner be provided another opportunity to contest the tax demand.
4. Mr. B. Ramanakumar, learned senior standing counsel, accepts notice for respondents 1 to 3. Mr. T.N.C.Kaushik, learned Additional Government Pleader, accepts notice for respondents 4 to 8. Mr. T.N.C.Kaushik points out that the petitioner replied to the intimation and show cause notice and these replies were taken into consideration while issuing the impugned order. Therefore, he submits that no interference is warranted.
5. In the petitioner’s reply to the show cause notice, as regards defect no.12, the petitioner has stated that it is unable to understand as to where the amounts specified in the show cause notice were taken from. The petitioner also stated that once the said information is provided, the petitioner would be in a position to respond. In spite of such reply, in the operative portion of the impugned order, the following finding was recorded:
“The tax payer has not produced any specific clarification and neither filed any supporting documents for the discrepancy. Due to lack of such documents, the proposal is hereby confirmed.”
As regards defect no.2, the petitioner had stated that zero-rated supplies were made and enclosed relevant invoices. In the operative portion of the order, the following finding was recorded:
“The tax payer has produced only invoice copies. They have not produced SEZ sale agreement copy, purchase order copy, bank statement, Endorsement certificate for the entire value. In the absence of such records, the proposal is hereby confirmed. “
As regards the above defects, it appears that the assessment order was issued without providing a reasonable opportunity to the petitioner to respond to the respective defects by placing relevant documents on record. Solely for such reason, the impugned order calls for interference.
6. At the same time, it should be recognised that such order was issued after an intimation and the show cause notice was received by the petitioner. Since the petitioner has not availed of such opportunities and approached this Court after the assessment order was issued, it is just and appropriate that the petitioner be put on terms.
7. On instructions, learned counsel for the petitioner submits that the petitioner is willing to remit 10% of the disputed tax demand as a condition for remand.
8. Therefore, the impugned order dated 20.12.2023 is set aside and the matter is remanded for reconsideration subject to the condition that the petitioner remits 10% of the disputed tax demand as agreed to within a period of two weeks from the date of receipt of a copy of this order. Within the aforesaid period, the petitioner is also permitted to submit additional documents in support of the reply to the show cause notice. Upon receipt of the petitioner’s reply and upon being satisfied that the 10% of the disputed tax demand was received, the assessing officer is directed to provide a reasonable opportunity to the petitioner, including a personal hearing, and thereafter issue a fresh order within two months from the date of receipt of the petitioner’s reply.
9. The writ petition is disposed of on the above terms without any order as to costs. Consequently, connected miscellaneous petitions are closed.