Case Law Details
Mataji Hardware Vs Deputy State Tax Officer (Madras High Court)
The Madras High Court has intervened in a GST assessment case, ordering a remand for fresh consideration due to the belated upload of a show cause notice on the GST portal. The case involved Mataji Hardware, who challenged an assessment order issued by the Deputy State Tax Officer, claiming they were unaware of the initial notice due to its delayed posting and their hospitalization.
The petitioner argued that the assessment order, which demanded tax, interest, and penalties for the assessment year 2022-2023, was passed without affording them a proper opportunity for a hearing. They contended this violated the principles of natural justice. The respondents, on the other hand, asserted that they had uploaded the show cause notice and reminder notices on the GST portal, and the petitioner’s failure to respond led to the assessment order.
The High Court acknowledged the petitioner’s claim of belated notice and their inability to respond due to hospitalization. Furthermore, the court noted that a personal hearing was not granted before the assessment order was issued. Recognizing the importance of procedural fairness, the court determined that the assessment order violated the principles of natural justice. To rectify this, the court ordered a remand, allowing the petitioner to present their case.
As a condition for the remand, the court directed the petitioner to deposit 20% of the disputed tax liability within four weeks. Upon receiving this deposit, the respondents were instructed to provide the petitioner with an opportunity to file their reply and supporting documents within two weeks. Subsequently, the respondents must schedule a personal hearing with 14 days’ clear notice and pass a fresh order based on the petitioner’s submissions and in accordance with the law. This ruling highlights the importance of timely communication and adherence to procedural fairness in GST assessments. It also shows a courts willingness to remand a case when natural justice is not upheld.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
This Writ Petition has been filed challenging the order of the 1st respondent dated 18.07.2024 and to quash the same as illegal and consequentially remand back the matter to the 1st Respondent for passing a fresh order after consideration of the explanation of the petitioner.
2. Mr. M. Venkateshwaran, learned Special Government Pleader (Taxes), takes notice on behalf of the Respondents.
3. By consent of the parties, the main Writ Petition is taken up for disposal at the time of admission stage itself.
4. The learned counsel for the petitioner submits that show cause notice dated 18.11.2023 was issued to the petitioner. Since the same was uploaded in the GST Portal belatedly and as the petitioner got admitted in the hospital at the relevant point of time, the petitioner was not aware of the same. In the meantime, the 1st respondent passed the impugned order dated 18.07.2024, demanding tax along with interest and penalty for the Assessment Year 2022-2023.
5. Further, he would submit that impugned assessment order came to be passed without affording an opportunity of hearing to the Petitioner and therefore the same is in violation of principles of natural justice and hence prays to set aside the same.
6. The learned Special Government Pleader (Taxes) appearing for the Respondent submitted that though the Show Cause Notice followed by reminder notices were issued to the Petitioner, by uploading the same in the GST portal, the Petitioner failed to submit its reply and therefore impugned assessment order came be passed.
7. In reply, the learned counsel for the petitioner would fairly submit that the petitioner is now ready and willing to pay 10% of the disputed tax liability made by the respondent in the event of providing an opportunity to them to file their reply along with the required documents to substantiate their claim, for which, the learned Special Government Pleader (Taxes) appearing for the Respondent would submit that subject to payment of 25% of the disputed tax liability, the matter may be remanded back to the respondents for fresh consideration.
8. Heard the learned counsel for the petitioner and the learned Special Government Pleader (Taxes) for the Respondent and also perused the materials available on record.
9. In the present case, since the show cause notice was uploaded in the GST portal belatedly, by which time the petitioner was said to be hospitalized and hence the petitioner was not aware of the same and therefore failed to submit its reply.
10. Further, it appears that opportunity of personal hearing was not granted to the Petitioner prior to passing of impugned order. Hence, this Court is of the view that the impugned order passed is in violation of principles of natural justice and it is just and necessary to provide an opportunity to the petitioner to establish their case on merits. In such view of the matter, this Court is inclined to set aside the impugned assessment order dated 18.07.2024 passed by the 1st Respondent. Accordingly, this Court passes the following order:-
(i) The order impugned herein is set aside and the matter is remanded to the Respondent for fresh consideration on condition that as volunteered by the Petitioner, they shall pay 20% of disputed tax to the Respondent within a period of four weeks from the date of receipt of a copy of this order and the setting aside of the impugned order will take effect from the date of payment of the said amount.
(ii) The Petitioner shall file their reply/objection along with the required documents, if any, within a period of two weeks thereafter.
(iii) On filing of such reply/objection by the petitioner, the respondent shall consider the same and issue a 14 days clear notice by fixing the date of personal hearing to the petitioner and thereafter, pass appropriate orders on merits and in accordance with law, after hearing the petitioner, as expeditiously as possible.
11. Accordingly, the writ petition is disposed of. There is no order as to costs. Consequently, the connected miscellaneous petition is closed.
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