Tvl. Senthil Hardwares Vs State Tax Officer
Date: July 29, 2024
Subject Matter
GST Order cannot be passed beyond defects mentioned in the SCN
Summary
In this case, the petitioner challenged an order dated April 27, 2024, regarding tax dues confirmed by the respondent for the assessment year 2018-19. The respondent had issued a notice (DRC 01) to the petitioner on April 19, 2022, regarding the tax liability. After a personal hearing held on April 27, 2024, where the petitioner submitted a detailed reply that was accepted, the respondent still issued a demand for the tax amount not specified in the initial notice. The petitioner contended that he was not properly informed about certain defects regarding his Input Tax Credit claims and that the proceedings violated the principles of natural justice because the impugned order addressed issues not communicated previously. On the other hand, the respondent argued that the petitioner failed to provide the necessary documents to validate their claims for Input Tax Credit. The court found merit in the petitioner's argument that the order violated natural justice principles, leading to the conclusion that the reasoning behind the impugned order was unsustainable. Consequently, the court quashed the impugned order and directed the respondent to issue a fresh show cause notice and reconsider the matter in accordance with the law, ensuring the petitioner has an opportunity to be heard. The court provided timelines for these actions and allowed the petition with no costs.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
This Writ Petition is disposed of at the time of admission after hearing the learned counsel for the petitioner and learned Additional Government Pleader for the respondent and after dispensing with the counter filed by the respondent.
2. The petitioner is before this Court against the impugned order dated 27.04.2024 passed by the respondent for the assessment year 2018-19 bearing reference in 33AKBPN2569C1ZH.
3. By the impugned order, the respondent has confirmed the following amounts as tax due from the petitioner together with the interest and penalty:
4. The specific case of the petitioner is that the petitioner was issued with a 2/7 notice in DRC 01 in GST portal on 19.04.2022, followed by remainder for personal hearing dated 13.02.2024 and that the personal hearing was held on 27.04.2024.
5. It is the case of the petitioner that on the said date, the petitioner filed a detailed reply, which has also been accepted by the respondent. However, in the impugned order, the respondent has demanded the aforesaid amount.
6. It is submitted that the aforesaid amount was not a part of the notice that was issued to the petitioner in GSTR 01 dated 19.04.2022, which was replied by the petitioner on 27.04.2024.
7. The learned Additional Government Pleader for the respondent, on the other hand, would submit that the petitioner has not produced the requisite documents to substantiate that the petitioner had validly availed the Input Tax Credit and therefore, the impugned order has been confirmed the demand as detailed above.
8. Having considered the submissions made by the learned counsel for the petitioner and learned Additional Government Pleader for the respondent, the Court is of the view that the impugned order suffers from the gross violation of the principles of natural justice as the petitioner was not put to notice on defect No.1. Therefore, the reasoning, which produced in conclusion of the impugned order, is also unsustainable, as reads under:
9. In view of the above, the Court is left with no other option, but to quash the impugned order and to remit the case back to the respondent to pass a fresh order on merits.
10. The impugned order, which stands quashed, shall be treated as 5/7 corrigendum to the notice in DRC 01 dated 19.04.2022. The respondent is also directed to issue fresh additional addendum to the above as a show cause notice within a period of 45 days from today. The petitioner shall, thereafter, file a reply to the same within a period of 30 days. The respondent shall thereafter pass a fresh order on merits and in accordance with law as expeditiously as possible preferably within a period of two months. Needless to state, the petitioner shall be heard before passing the order.
This Writ Petition is allowed, with above directions. No costs. Consequently, connected miscellaneous petitions are closed.