Case Law Details
JC Valvulas India Private Limited Vs Commercial Tax Officer (Madras High Court)
The Madras High Court addressed a writ petition filed by JC Valvulas India Private Limited, challenging an assessment order from the Commercial Tax Officer. The core issue revolved around the petitioner’s claim that their request for a personal hearing, submitted in response to a show cause notice, was disregarded. JC Valvulas, a manufacturer and supplier of valves, had been assessed for the 2019-20 fiscal year, during which discrepancies were identified in their Goods and Services Tax (GST) returns. These discrepancies included issues related to input tax credit (ITC) reversal on non-business and exempt supplies, under-declaration of ineligible ITC, and ITC claims from cancelled dealers, return defaulters, and non-tax payers. The petitioner argued that the impugned order, issued on August 24, 2024, violated principles of natural justice and contravened Section 75(4) of the GST Act, which mandates a personal hearing when requested.
The court examined the sequence of events, noting that JC Valvulas had received a GST DRC 01 notice on May 28, 2024, detailing the identified discrepancies. In their response dated July 11, 2024, the petitioner sought additional time to furnish supporting documents and explicitly requested a personal hearing. However, the assessment order was issued without granting this request. The respondent’s counsel acknowledged the oversight and conceded that a personal hearing should be provided. Consequently, the Madras High Court set aside the impugned order, directing the Commercial Tax Officer to grant JC Valvulas an opportunity for a personal hearing. The petitioner was also permitted to submit further documents, objections, or replies to the respondent. The court disposed of the writ petition, emphasizing the importance of adhering to procedural fairness and the statutory right to a personal hearing in tax assessment proceedings.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
The present Writ Petition is filed challenging the impugned order passed by the respondent dated 24.08.2024 relating to the assessment year 2019-20, on the short ground that the petitioner’s request for a personal hearing vide reply dated 11.07.2024 was not even considered.
2. The petitioner is engaged in the business of manufacturing and supply of valves. The petitioner is a registered dealer under Goods and Services Act, 2017. During the relevant period, the petitioner had filed its return and paid appropriate taxes. However, on examination of the information furnished in the returns under various heads, the following discrepancies inter alia were noticed:
i) Input tax credit to be reversed on non-business transactions and exempt supplies
ii) Under declaration of ineligible input tax credit Input tax credit claimed from cancelled dealers, return defaulters and tax non payers.
3. It is submitted by the learned counsel for the petitioner that a show cause notice was issued in GST DRC 01 to the petitioner on 28.05.2024.In response to the same, the petitioner filed its reply dated 11.07.2024 seeking time to furnish some more documents and also requested for personal hearing. The impugned order came to be passed, without considering the request for personal hearing, it was thus submitted that the impugned order suffers from violation of principles of natural justice and is also contrary to the mandate contained in Section 75(4) of the Act.
4. The learned Government Advocate for the respondent would submit that the petitioner’s would be granted an opportunity of personal hearing and the petitioner may submit all the documents, during the course of personal hearing.
5. In view thereof, the impugned order dated 24.08.2024 is set aside. It is open to the petitioner to submit documents/additional objections/reply, if any, to the respondents and the respondents would proceed with the matter after affording the petitioner an opportunity of personal hearing.
6. Accordingly, the Writ Petition stands disposed of. There shall be no order as to costs. Consequently, connected miscellaneous petitions are closed.
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