Case Law Details
T.B. Sabrish Vs Assistant Commissioner (Madras High Court)
Assessment Order in GST was set aside due to lack of proper notice and matter remanded subject to deposit of 25% of disputed tax: Madras HC
Conclusion: Mere uploading of notices and orders on the GST portal might not be sufficient to fulfill the requirement of proper service, especially when it prevented assessee from being aware of the proceedings. Therefore, the assessment order was set aside and assessee was provided with another chance to respond upholding the principles of natural justice and fairness in tax proceedings.
Held: Assessee was engaged in trading of silver and related products and was registered under the Goods and Services Tax Act, 2017. During the relevant period 2023- 24, assessee filed its returns and paid the appropriate taxes. On verification of GSTR returns, it was found that assessee had supplied goods and services without issuing any invoices thereby warranting penalty. A notice in DRC-01A was issued and another notice in DRC-01 was issued. Further, personal hearing was fixed on 28.02.2024. However, assessee had neither filed its reply nor availed the opportunity for a earing. Assessee submitted that the impugned order of assessment had been served on assessee by tender or sending it by RPAD, instead it had been uploaded in the “view additional notices and orders” tab on the GST Portal, thereby, assessee was unaware of the initiated proceedings and was thus unable to participate in the adjudication proceedings. On appeal. It was held that in case of M/s K. Balakrishnan Balu Cables vs. O/o. Assistant Commissioner of GST, Central Excise, where the matter was remanded under similar circumstances, requiring the assessee to deposit 25% of the disputed tax. In the present case, assessee expressed willingness to pay 25% of the disputed tax. The court set aside the impugned assessment order. The court directed that upon payment of 25% of the disputed tax, the impugned order should be treated as a show cause notice. Assessee was granted an opportunity to submit their objections within a specified time.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
The present writ petition is filed challenging the impugned order dated 18.07.2024 for the period 2023-24 on the premise that there is violation of principles of natural justice.
2. It is submitted by the learned counsel for the petitioner that the petitioner is engaged in trading of silver and related products and is registered under the Goods and Services Tax Act, 2017. During the relevant period 2023- 24, the petitioner filed its returns and paid the appropriate taxes. On verification of GSTR returns, it was found that the petitioner has supplied goods and services without issuing any invoices thereby warranting penalty.
3. It is submitted by the learned counsel for the petitioner that a notice in DRC-01A was issued on 05.02.2024 and another notice in DRC-01 was issued on 19.02.2024. Further, personal hearing was fixed on 28.02.2024. However, the petitioner had neither filed its reply nor availed the opportunity for a earing. It is submitted by the learned counsel for the petitioner that the impugned order of assessment has been served on the petitioner by tender or sending it by RPAD, instead it had been uploaded in the “view additional notices and orders” tab on the GST Portal, thereby, the petitioner was unaware of the initiated proceedings and was thus unable to participate in the adjudication proceedings. It is submitted by the learned counsel for the petitioner that if the petitioner is provided with an opportunity, they would be able to explain the alleged discrepancies.
4. The learned counsel for the petitioner would place reliance upon the recent judgment of this Court in the case of M/s. K. Balakrishnan, Balu Cables O/o. the Assistant Commissioner of GST & Central Excise in W.P.(MD)No.11924 of 2024 dated 10.06.2024, to submit that this court has remanded the matter back in similar circumstances subject to payment of 25% of the disputed taxes.
5. It was further submitted that the petitioner is ready and willing to pay 25% of the disputed tax and that they may be granted one final opportunity before the adjudicating authority to put forth their objections to the proposal, to learned Government Advocate appearing for the respondent does not serious objection.
6. By consent of both parties, the writ petition stands disposed of on the following terms:
a) The impugned order dated 18.07.2024 is set aside.
b) The petitioner shall deposit 25% of the disputed taxes as admitted by the learned counsel for the petitioner and the respondent, within a period of four weeks from the date of receipt of a copy of this order.
c) If any amount has been recovered or paid out of the disputed taxes, including by way of pre-deposit in appeal, the same would be reduced/adjusted, from/towards the 25% of disputed taxes directed to be paid. The assessing authority shall then intimate the balance amount out of 25 % of disputed taxes to be paid, if any, within a period of one week from the date of receipt of a copy of this order. The petitioner shall deposit such remaining sum within a period of three weeks from such intimation.
d) The entire exercise of verification of payment, if any, intimation of the balance sums, if any, to be paid for compliance with the direction of payment of 25% of the disputed taxes, after deducting the sums already paid and payment by the petitioner of the balance amount, if any, on intimation in compliance with the direction shall be completed within a period of four weeks from the date of copy of this order.
e) Failure to comply with the above condition viz., payment of 25% of disputed taxes within the stipulated period i.e., four weeks from the date of receipt of a copy of this order shall result in restoration of the impugned order.
f) If there is any recovery by way of attachment of Bank account or garnishee proceedings, the same shall be lifted /withdrawn on complying with the above condition viz., payment of 25 % of the disputed taxes.
g) On complying with the above condition, the impugned order of assessment shall be treated as show cause notice and the petitioner shall submit its objections within a period of four (4) weeks from the date of receipt of a copy of this order along with supporting documents/material. If any such objections are filed, the same shall be considered by the respondent and orders shall be passed in accordance with law after affording a reasonable opportunity of hearing to the petitioner. It is made clear that if the above conditions viz., 25% of disputed taxes is not complied or objections are not filed within the stipulated period, four weeks respectively from the date of receipt of a copy of this order, the impugned order of assessment shall stand restored.
7. There shall be no order as to costs. Consequently, connected miscellaneous petitions are closed.
Author Bio
