Case Law Details
Tvl. Anandh Store Vs Commercial Tax Officer (Madras High Court)
In a significant ruling, the Madras High Court has addressed a dispute in the case of Tvl. Anandh Store Vs Commercial Tax Officer (W.P.No. 14849 of 2024). The court examined the discrepancies between the show cause notice (SCN) and the final order issued to the petitioner, ultimately directing that the impugned order be treated as an SCN.
The petitioner, Tvl. Anandh Store, challenged an order dated 09.11.2023, arguing that it extended beyond the scope of the original SCN. The SCN, issued on 20.10.2023, questioned a shortfall in Input Tax Credit (ITC) as reflected in the petitioner’s GSTR 2A, compared to their GSTR 3B returns, amounting to Rs.6,33,699/-. However, the impugned order confirmed a tax liability of Rs.9,34,236/-, which was significantly higher than the amount mentioned in the SCN. The petitioner’s counsel argued that comparing GSTR 2A and 3B for the financial year 2017-2018 was inappropriate since the GSTR 2A form had not been prescribed during that period. The counsel highlighted the procedural lapse, indicating that the final order imposed a liability beyond what was initially indicated in the SCN. In response, the learned Additional Government Pleader, C. Harsha Raj, acknowledged the notice for the respondent and conceded the disparity between the SCN and the impugned order. He agreed with the petitioner’s contention that the final order should be treated as an SCN, allowing the petitioner to respond appropriately. Upon reviewing the documents, the court concurred with the petitioner’s position. The judgment emphasized that the impugned order traveled beyond the scope of the SCN, rendering it procedurally unfair. Consequently, the court directed that the impugned order be treated as an SCN.
The Madras High Court’s decision in Tvl. Anandh Store Vs Commercial Tax Officer underscores the importance of adhering to procedural fairness in tax adjudication. By setting aside the impugned order and directing it to be treated as an SCN, the court ensured that the petitioner would have a fair opportunity to present their case. The petitioner was granted three weeks to respond to the SCN, and the respondent was instructed to provide a reasonable opportunity for a personal hearing before issuing a fresh order within three months. This ruling reinforces the necessity for tax authorities to maintain consistency between SCNs and final orders, safeguarding taxpayers’ rights.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
An order in original dated 09.11.2023 is challenged on the ground that such order travelled beyond the scope of the show cause notice. In relation to financial year 2017-2018, proceedings were initiated against the petitioner by issuing show cause notice dated 20.10.2023. The petitioner replied thereto on 28.10.2023 and 06.11.2023. The impugned order was issued in the said facts and circumstances.
2. Learned counsel for the petitioner referred to the show cause notice and pointed out that the petitioner was called upon to show cause with regard to the short fall in Input Tax Credit (ITC) in GSTR 2A, as compared to petitioner’s GSTR 3B return to the extent of Rs.6,33,699/-. By contrast, he points out that the confirmed tax proposal under the impugned order is to the extent of Rs.9,34,236/-. He further submits that the comparison between GSTR 2A and 3B should not have been undertaken for the financial year 2017-2018 in as much as the GSTR 2A form had not been prescribed during
3. Mr. C. Harsha Raj, learned Additional Government Pleader, accepts notice for the respondent. In view of the disparity between the impugned order and show cause notice, he submits that the impugned order may be treated as a show cause notice and the petitioner may be permitted to reply thereto.
4. On comparing the impugned order and the show cause notice, the contention of learned counsel that the impugned order travels beyond the scope of the show cause notice is liable to be accepted. In those circumstances, as submitted by learned Additional Government Pleader, the impugned order may be treated as a show cause notice.
5. For reasons set out above, W.P.No. 14849 of 2024 is disposed of by directing that the impugned order dated 09.11.2023 be treated as a show cause notice. The petitioner is permitted to submit a reply in respect thereof within a period of three weeks from the date of receipt of a copy of this Upon receipt of the petitioner’s reply, the respondent is directed to de a reasonable opportunity to the petitioner, including a personal hearing, and thereafter issue a fresh order within three months from the date of receipt of the petitioner’s reply. In view of the assessment order being set aside, the bank attachment is raised.
6. The writ petition is disposed of on the above terms without any order as to costs. Consequently, connected miscellaneous petitions are closed.
Author Bio
