Case Law Details
Ogadram Vs Assistant Commissioner (ST) (Madras High Court)
In a significant legal development, the Madras High Court recently addressed the case of Ogadram Vs Assistant Commissioner (ST), focusing on a GST demand order alleged to have violated principles of natural justice.
The case revolves around an order dated 18.08.2023, wherein the petitioner contested the validity of proceedings citing non-receipt of a show cause notice. The petitioner, engaged in the sale of electrical and plumbing hardware under the composition scheme, filed regular returns but claimed ignorance of the notice uploaded on the portal. The respondent argued compliance with natural justice by issuing relevant intimations and notices.
The petitioner’s counsel emphasized their client’s timely response to notices and discrepancies in the turnover considered for tax assessment. It was argued that due process was undermined as the petitioner was unaware of critical communications, impacting their ability to participate effectively in proceedings.
The High Court, after careful consideration, set aside the impugned order, highlighting the necessity of affording natural justice. The court directed the petitioner to deposit 10% of the disputed tax demand within 15 days, allowing for a fresh reply to the show cause notice. A specific timeline was set for the respondent to review the petitioner’s submission and issue a revised order, ensuring a fair opportunity for personal hearing and due process.
In conclusion, the Madras High Court’s decision in Ogadram Vs Assistant Commissioner (ST) underscores the importance of procedural fairness in tax proceedings. By nullifying the order due to procedural lapses and mandating a fair opportunity for the petitioner, the court reaffirmed the foundational principles of natural justice in administrative actions.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
An order in original dated 18.08.2023 is assailed on the ground of breach of principles of natural justice.
2. The petitioner is engaged in selling electrical and plumbing hardware. He had opted for the composition scheme and filed annual returns in Form GSTR 4 and quarterly returns in Form CMP-08. Upon receipt of a notice dated 15.07.2022 by registered post on 19.07.2022, the petitioner replied on 29.07.2022. Since the show cause notice dated 28.11.2022 was uploaded on the portal but not communicated to the petitioner through any other mode, the petitioner states that he was unaware of such show cause notice and did not reply to the same.
3. Learned counsel for the petitioner referred to the reply dated 29.07.2022 and pointed out that the petitioner had stated that the turnover reported by him in Form CMP-08 was Rs.6,37,595/-. Learned counsel contends that this reply was not taken into consideration in the impugned order. He also submits that the petitioner could not participate in proceedings on account of not being aware of the same and, hence, seeks another opportunity. On instructions, he submits that the petitioner agrees to remit 10% of the disputed tax demand as a condition for remand.
4. Mr. T.N.C.Kaushik, learned Additional Government Pleader, accepts notice for the respondent. He points out that principles of natural justice were complied with by issuing intimation dated 28.04.2022 and show cause notice dated 28.11.2022.
5. The petitioner’s reply dated 29.07.2022 indicates that the sales turnover as per the return in Form CMP-08 was Rs.6,37,595/-. In the impugned order, the turnover of Rs.5,47,405/- was taken into account. It appears that this sum was compared with the purchase value as per the supplier’s GSTR 1 statement. The tax proposal was confirmed on the basis that the tax payer did not respond to the show cause notice. In view of the assertion that the tax payer could not participate in proceedings on account of being unaware of the same, the interest of justice warrants that the petitioner be provided an opportunity by putting the petitioner on terms.
6. For reasons set out above, the impugned order dated 18.08.2023 is set aside subject to the condition that the petitioner remits 10% of the disputed tax demand as agreed to within a period of 15 days from the date of receipt of a copy of this order. The petitioner is permitted to submit a reply to the show cause notice within the aforesaid period. Upon receipt of the petitioner’s reply and upon being satisfied that 10% of the disputed tax demand was received, the respondent is directed to provide a reasonable opportunity to the petitioner, including a personal hearing, and thereafter issue a fresh order within a period of three months from the date of receipt of the petitioner’s reply.
7. The writ petition is disposed of on the above terms without any order as to costs. Consequently, connected miscellaneous petitions are closed.
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