Sri Rajaa Store Vs State Tax Officer (Madras High Court)
The case of Sri Rajaa Store vs State Tax Officer came before the Madras High Court concerning an assessment order dated 29th December 2023. The petitioner challenged the order, citing a breach of natural justice principles.
The petitioner, a business operating on thin margins, contended that their entire tax liability was offset by Input Tax Credit (ITC). Upon receiving a show cause notice in September 2023, they responded in October, highlighting that their outward supplies didn’t generate tax liability after adjusting ITC. However, due to unforeseen circumstances like cyclone Michaung, they couldn’t attend the hearing scheduled for December 13, 2023.
The crux of the matter lay in the absence of annexed documents with the petitioner’s reply. Despite stating their intention to submit relevant documents, the entire ITC availed by the petitioner was re-versed, leading to a significant tax liability. The court acknowledged the petitioner’s claim regarding the availability of proper documentation and the non-generation of tax liability from outward supplies.
The Madras High Court set aside the assessment order on the condition that the petitioner remit Rs. 5,00,000 towards the disputed tax liability within three weeks and submit additional documents sup-porting their reply within the same period. Upon receipt and verification of these documents and the mentioned sum, the respondent was directed to provide a reasonable opportunity for the petitioner to present their case, followed by the issuance of a fresh order within two months.
