Case Law Details
Diamong Cargo Movers Vs State Tax Officer II (Madras High Court)
Accountant of firm failed to inform about notices that preceded impugned order confirming demand, an opportunity to ventilate its grievance before respondents was to be granted to assessee
The case of Diamond Cargo Movers Vs State Tax Officer II involves a dispute regarding the demand orders issued for the assessment year 2017-18. The petitioner, a firm, challenged the order passed by the respondent on 14th October 2023. The demand was based on two prior show cause notices dated 6th April 2022 and 20th July 2023. The petitioner argued that they were unaware of these notices, as their accountant had failed to inform them. Consequently, the petitioner did not have an opportunity to respond before the orders were confirmed, which led to a disputed tax demand. The issue was brought to the High Court after the department insisted on payment.
The Government Advocate countered by arguing that the writ petition was time-barred, citing the Supreme Court ruling in Assistant Commissioner (CT) LTU, Kakinada vs. Glaxo Smith Kline Consumer Healthcare Limited (2020) and Singh Enterprises vs. Commissioner of Central Excise (2008), asserting that the appellate remedy was also time-limited. However, the Madras High Court acknowledged the grievance of the petitioner and decided to allow them a chance to respond. The court quashed the impugned order and remitted the case to the respondent for fresh proceedings. The petitioner was directed to deposit 25% of the disputed tax within 30 days and file a consolidated reply. The case was to be decided on its merits, with a fresh order to be passed within three months, provided the petitioner complied with the terms.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
The petitioner is before this Court as against the impugned order, dated 14.10.2023 passed by the respondent for the assessment year 2017-18. By the impugned order, the demand proposed in show cause notice in DRC 01A, dated 06.04.2022 and DRC 01, dated 20.07.2023 have been confirmed.
2. The petitioner fails to take advantage of the show cause notices issued by the respondent before the impugned orders were passed. It is submitted that the petitioner’s accountant had failed to inform the petitioner about the notices that preceded the impugned orders and also the impugned orders. Only after the department insisted on the petitioner paying disputed tax, the petitioner became aware of the impugned orders.
3. The above submission is opposed by the learned Government Advocate for the respondent, on the ground that the Writ Petition is hopelessly time barred and therefore, liable to be dismissed, on account of latches, in the light of the decision of the Hon’ble Supreme Court in the case of Assistant Commissioner (CT) LTU, Kakinada and others vs. Glaxo Smith Kline Consumer Health Care Limited reported in 2020 SCC Online SC 440.
4. It is submitted that the appellate remedy is also time barred in terms of limitation under Section 107 of the respective GST Enactments as held by the Hon’ble Supreme Court in the case of Singh Enterprises Vs. Commissioner of Central Excise, Jamshedpur and others reported in (2008) 3 SCC 70 and submitted that this Writ Petition is liable to be dismissed.
5. Having considered the arguments advanced by the learned counsel for the petitioner and the learned Government Advocate for the respondent, the petitioner can be given an opportunity to ventilate his grievance before the respondent on terms. Therefore, the petitioner shall deposit 25% disputed tax confirmed by the impugned order from Electronic Cash Ledger within a period of thirty (30) days from the date of receipt of copy of this order. The impugned order, dated 14.10.2023 passed by the respondent is quashed and the case is remitted back to the respondent to pass a fresh order on merits. The impugned order which stands quashed shall be treated as Addendum to the Show Cause Notice in DRC 01A, dated 06.04.2022 and DRC 01, dated 20.07.2023.
6. The petitioner shall file a consolidated reply within a period of 30 days from the date of receipt of copy of this order. The respondent shall thereafter proceed to pass a final order on merits and in accordance with law, as expeditiously as possible, preferably, within a period of three (3) months from the date of reply to be filed by the petitioner. It is made clear that in case the petitioner fails to either file a reply or deposit the amount as directed above, the respondent is at liberty to proceed against the petitioner, as if this writ petition had been dismissed today in limine. It is needless to state, the petitioner shall be heard before passing the final order.
7. In view of the above, this Writ Petition is allowed. No costs. Consequently, connected Miscellaneous Petition is closed.
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