Case Law Details
Prushin Fintech Pvt. Ltd. Vs Union of India (Bombay High Court)
A recent judgment by the Bombay High Court sheds light on the importance of government officers’ accountability to taxpayers. The case involves a petitioner, Prushin Fintech Pvt. Ltd., facing inaction from state officers despite multiple representations. This article delves into the details of the case, the court’s observations, and its implications for administrative responsibility.
Detailed Analysis:
The primary issue at hand is the petitioner’s frustration with the lack of response from government officers despite making over 20 representations. Prushin Fintech Pvt. Ltd., a service provider, had filed its returns for the period 2017-2018. However, it encountered technical issues with the online portal, preventing the filing of the return for January 2019. The portal indicated that earlier returns were not filed, despite Prushin Fintech’s claims to the contrary.
In response to this issue, the petitioner made several representations to various authorities, including the State GST department, the grievance portal, the Finance Ministry, and the Ministry for Micro, Small, and Medium Enterprises (MSME). Unfortunately, none of these representations received a response. The petitioner also raised grievances through the portal, adding to the list of unanswered pleas.
The impasse took a concerning turn when the petitioner received a show cause notice dated 29th November 2022, alleging a delay in filing returns and, consequently, the denial of input tax credit under Section 16(4) of the Central Goods and Services Tax (CGST) Act. Naturally, the petitioner contested this notice.
The Bombay High Court took a strong stance on the matter, expressing its alarm at the inaction by state officers. It noted that such a lack of response is contrary to the government’s policy of promoting ease of doing business. The court emphasized that revenue officials should not adopt an approach of silence, as it disrupts the well-planned statutory regime and leads to unnecessary litigation.
The court believes that no taxpayer should be subjected to such suffering and compelled to litigate against the government on issues that could be readily addressed at the departmental level. It firmly stated that government officers must be accountable, not only to the taxpayers but also to the court.
In response to the situation, the court ordered the Commissioner of State Tax to file an affidavit after verifying the portal and the system accessible to Prushin Fintech Pvt. Ltd. The affidavit should clarify the correctness of the acknowledgment regarding the returns filed by the petitioner and address the merits of the petitioner’s contentions. The court set a two-week deadline for the affidavit’s submission.
Conclusion:
The Bombay High Court’s judgment underscores the critical need for government officers to be responsive and accountable to taxpayers. In this case, the court expressed its concern over the lack of response to over 20 representations made by the petitioner. The court’s stance emphasizes that accountability is essential for maintaining transparency, promoting an ease of doing business, and avoiding unnecessary litigation.
This judgment serves as a reminder to government authorities that addressing taxpayers’ grievances promptly is not only a moral imperative but also a legal obligation. The court’s decision to involve the Commissioner of State Tax and require a clear affidavit reflects the importance of upholding administrative responsibility.
In conclusion, this case sets a precedent for ensuring that government officers fulfill their duty to provide timely and appropriate responses to taxpayers, fostering a more harmonious and efficient relationship between taxpayers and government agencies.
The matter was argued by Ld. Counsel Bharat Raichandani
FULL TEXT OF THE JUDGMENT/ORDER OF BOMBAY HIGH COURT
In our opinion, this appears to be a gross case in as much as more than 20 representations addressed by the Petitioner to the Assistant Commissioner, Deputy Commissioner and the Commissioner of Maharashtra State Tax have not been responded and that too on the issue that the Petitioner has already filed its GST-return and despite which on the ground of non-filing of the return, a show cause notice dated 29th November 2022 as impugned has been issued to the Petitioner.
2. On the above backdrop, the case of the Petitioner is that time and again, the Petitioner had informed the concerned officers that the returns were already filed, as also that there was an issue on the operation of the electronic portal. Even acknowledgments of filing of the returns were submitted and they are also part of the record. The Petitioner has contended that despite all this, the impugned show cause notice has been issued on the ground that the returns have not been filed.
3. We are, infact, disturbed to notice the inaction on the part of the State officers to whom several representations were addressed, who have not even bothered to respond to such repeated representations. Eventually, the Petitioner was also required to approach the Hon’ble Cabinet Ministers of the Central Government, namely the Finance Minister and the Minister for Micro, Small and Medium Enterprises.
4. Certainly, such an approach on the part of the State Officers, who are supposed to be dealing with the assessees is not expected and when it is informed to us that the policy of the Government is of an ease of during business. If this be so, the basic requirement in regard to the grievances being made by the assessees through their representations need to be addressed with utmost urgency and more particularly in a case as the present, wherein, more than 20 representations being made by the Petitioner were not addressed. This itself is quite alarming. There cannot be an approach of reticence on the part of the revenue officials as this would lead to a disharmony in the working of a well planned statutory regime, which has perhaps led to unwarranted litigation.
5. We could have easily disposed of the petition directing that the representations of the Petitioner be considered by the department, however, we cannot overlook the accountability of the officers, not only to the assessee, but also to the Court and to justify as to what made them adopt such an approach of a dead silence in not responding to a single representation of the Petitioner, much less taking an appropriate decision by considering the issues as raised by the Petitioner, that the returns were already filed. We are of the clear opinion that atleast on such issues no assessee ought to suffer and be required to litigate against the Government on issues which can be easily redressed at the departmental level.
6. We may also note that for the first time in the reply affidavit, instead of responding to the Petitioner’s representation, a certain stand is being taken in regard to doubting the correctness of the acknowledgment in regard to the returns filed by the Petitioner. We would thus require the Commissioner of State Tax himself to file a clear affidavit after verifying the portal as also the system which is made available to the Petitioner-Assessee.
7. We would also want the Commissioner of State Tax to explain as to why such an approach to generate unwarranted litigation, on the part of the Officers ought not to be deprecated and taken to the logical conclusion. Let the affidavit also address on the merits of the Petitioner’s contention on the return having been filed, as also on the Petitioner’s contention of there being no justification in issuing the show cause notice. Such reply affidavit be placed on record within a period of 2 weeks from today. Copy of the same be served to the Petitioner well in advance.
8. On the adjourned date of hearing, we shall hear the parties on all issues as raised for our consideration and some of which we have noted above.
9. Stand over to 10th October 2023, High on Board.
In the meantime, the Respondents shall not proceed to hear the show cause notice.
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