Case Law Details
Tokyo Zairyo (India) Private Limited Vs Assistant Commissioner (Madras High Court)
Reply cannot be disregarded merely for non attendance of personal hearing by petitioner
The case of Tokyo Zairyo (India) Pvt Ltd vs Assistant Commissioner revolves around the challenge against an assessment order dated 29.12.2023, citing the disregard of the petitioner’s reply. Following an audit under applicable GST enactments, a show cause notice was issued on 30.09.2023, to which the petitioner responded on 28.11.2023. However, the impugned order was issued on 29.12.2023, prompting the petitioner to challenge it on the grounds of their disregarded reply.
The petitioner’s counsel highlights the disregard of the petitioner’s reply, labeling it as unauthorized solely because of the petitioner’s inability to attend the scheduled personal hearing. On the other hand, the learned Additional Government Pleader argues that the petitioner failed to produce certain essential documents, leading to the confirmation of the tax demand.
Upon examining the impugned order, it becomes apparent that similar findings were made regarding each audit observation. The order specifically mentions the rejection of the petitioner’s reply as unauthorized due to the absence of the petitioner during the personal hearing. This raises questions regarding the validity of such categorization and the subsequent disregard of the petitioner’s contentions.
Consequently, the court sets aside the impugned order and remands the matter for reconsideration, emphasizing the necessity of providing a reasonable opportunity to the petitioner, including a personal hearing. The respondent is directed to issue a fresh order within two months, ensuring the petitioner’s contentions are duly considered during the proceedings.
In conclusion, the case underscores the importance of procedural fairness and the right to be heard in administrative proceedings. Disregarding the petitioner’s reply solely on the grounds of non-attendance at a personal hearing is deemed unsustainable by the court. The order is set aside, affirming the principle of affording parties a fair opportunity to present their case. The writ petition is disposed of accordingly, with all contentions left open to the petitioner in the course of remanded proceedings.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
An assessment order dated 29.12.2023 is challenged on the ground that the petitioner’s reply was disregarded. Pursuant to an audit under Section 65 of applicable GST enactments, a show cause notice was issued to the petitioner on 30.09.2023. The petitioner replied to the audit report on 28.11.2023. The impugned order was issued thereafter on 29.12.2023.
2. Learned counsel for the petitioner invited my attention to the impugned order and pointed out that the petitioner’s reply was disregarded by describing the reply as an unauthorised reply. She further submits that the reply was disregarded merely because the petitioner was unable to attend the scheduled personal hearing.
3. Mr.T.N.C.Kaushik, learned Additional Government Pleader, accepts notice for the respondents. He points out that the petitioner failed to produce a separate balance sheet and profit & loss account for the Tamil Nadu branch. In view thereof, he submits that the tax demand was confirmed.
4. On perusal of the impugned order, it is evident that similar findings were recorded in respect of each audit observation dealt with therein. By way of illustration, the finding in respect of audit observation no.1 pertaining to turnover reconciliation is set out below:
The unauthorised reply of the tax payer is not accepted as the tax payer has not appeared for personal hearing to sign the reply or to explain their contention. Moreover, the conclusion of Audit Officer is confirmed.
Thus, it is clear that the petitioner’s reply was disregarded by categorising such reply as an unauthorised reply. It is unclear as to why the reply was described as unauthorised. In any event, the impugned order is vitiated by non consideration of the petitioner’s reply. Consequently, such order is unsustainable.
5. Hence, the impugned order dated 29.12.2023 is set aside and the matter is remanded for reconsideration. The respondent is directed to provide a reasonable opportunity to the petitioner, including a personal hearing, and thereafter issue a fresh order within two months from the date of receipt of a copy of this order. All contentions are left open to the petitioner in course of remanded proceedings.
6. The writ petition is disposed of on the above terms without any order as to costs. Consequently, connected miscellaneous petitions are closed.
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