Sakthi Industries Vs Deputy State Tax Officer-I (Madras High Court)
In a significant ruling, the Madras High Court addressed the petition filed by Sakthi Industries challenging an order dated 27.12.2023. The petitioner argued that the order breached the principles of natural justice. The court set aside the order, remanding the case for reconsideration, subject to the petitioner remitting 10% of the disputed tax demand. This article provides a detailed analysis of the judgment, the arguments presented, and the implications for similar cases.
Sakthi Industries, engaged in providing job work services to Sakthi Auto Component Limited, challenged an order dated 27.12.2023. The petitioner asserted that capital goods were procured in the financial year 2017-18 and deployed in job work in the subsequent financial year. Upon receiving a show cause notice on 25.09.2023, the petitioner responded on 21.12.2023, explaining the discrepancy between outward and inward supplies for that year.
Petitioner’s Arguments
The petitioner’s counsel contended that the reply to the show cause notice, dated 21.12.2023, was not considered in the impugned order. Despite this, the petitioner agreed to remit 10% of the disputed tax demand as a condition for remand. The counsel highlighted that the failure to consider the reply constituted a breach of natural justice principles.
