Tvl. Harshini Exports Vs e State Tax Officer (FAC) (Madras High Court)
The Madras High Court recently addressed a contentious GST assessment in the case of Tvl. Harshini Exports vs. e State Tax Officer (FAC). This case highlights significant issues regarding the application of GST rules, specifically Rule 30 of the CGST Rules, 2017.
The petitioner, Tvl. Harshini Exports, challenged an order dated 30th December 2023, alleging violations of natural justice and disputing the merits of the tax assessment. The company, involved in textile trade, argued that the assessing officer erred by applying Rule 30, which typically pertains to disputes over related-party transactions, to their case. They contended that proper communication channels were not utilized, leading to their unawareness of the proceedings until May 2024, when a bank attachment notice was received.
The crux of the petitioner’s defense rested on the assertion that their closing stock could have resolved any discrepancies between inward and outward supplies, had the assessing officer invoked statutory powers to request this information. The petitioner, while disputing the application of Rule 30, expressed willingness to remit 10% of the disputed tax amount as a gesture of cooperation pending a remand of the assessment.
In response, the Additional Government Pleader argued that all requisite notices and opportunities were duly provided to the petitioner, satisfying principles of natural justice. However, the court noted procedural lapses in the assessment process, particularly the assumption made by the assessing officer regarding the outward supply value.
