Case Law Details
Hitachi Systems India Private Limited Vs Union of India (Madras High Court)
The case of Hitachi Systems India Private Limited vs. Union of India before the Madras High Court revolves around the contention that the petitioner was not afforded a fair opportunity to contest a tax demand.
The petitioner, Hitachi Systems India Private Limited, received an intimation regarding alleged defects in January 2023, followed by a show cause notice in March 2023. Despite the petitioner’s responses to these communications, an assessment order was issued in December 2023, confirming the tax demand. The petitioner challenged this order on the grounds of inadequate opportunity to address the alleged defects.
During the proceedings, the petitioner’s counsel highlighted specific defects in the impugned order, emphasizing the lack of clarity and the petitioner’s inability to respond adequately due to missing information. The court observed discrepancies in the assessment process, noting that the order was issued without affording the petitioner a reasonable opportunity to present relevant documents.
While acknowledging that the petitioner had received prior notices and opportunities to respond, the court deemed it just and appropriate to set aside the impugned order and remand the matter for reconsideration. However, the court imposed a condition requiring the petitioner to remit 10% of the disputed tax demand within a specified period.
GST order was issued without affording the petitioner a reasonable opportunity to present relevant documents, court set aside the impugned order and remand the matter for reconsideration.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
An assessment order dated 20.12.2023 is assailed on the ground that the petitioner was not provided a reasonable opportunity to contest the tax demand.
2. The petitioner received an intimation on 23.01.2023 with regard to about 12 alleged defects. Such intimation was replied to on 02.2023. Thereafter, a show cause notice was issued on 07.03.2023 and replied to on 13.03.2023. The impugned order was issued in the above facts and circumstances on 20.12.2023.
3. Learned counsel for the petitioner focused on the discussion in the impugned order relating to defect no.12 and defect no.2. With regard to defect no.12, learned counsel pointed out that the petitioner had replied to the show cause notice and stated that the petitioner is unable to understand as to where the amounts specified in the show cause notice were taken from. He further submits that without clarifying this aspect, the demand was confirmed. As regards defect no.2, learned counsel points out that the petitioner had produced invoices to establish that the sales were zero-rated sales. He further submits that if the SEZ sale agreement copy and other documents had been requested for, the petitioner would have produced the same. By further submitting that the impugned order contains infirmities with regard to other defects also, learned counsel submits that the petitioner be provided another opportunity to contest the tax demand.
4. Mr. B. Ramanakumar, learned senior standing counsel, accepts notice for respondents 1 to 3. Mr. T.N.C.Kaushik, learned Additional Government Pleader, accepts notice for respondents 4 to 8. Mr. T.N.C.Kaushik points out that the petitioner replied to the intimation and show cause notice and these replies were taken into consideration while issuing the impugned order. Therefore, he submits that no interference is warranted.
5. In the petitioner’s reply to the show cause notice, as regards defect no.12, the petitioner has stated that it is unable to understand as to where the amounts specified in the show cause notice were taken from. The petitioner also stated that once the said information is provided, the petitioner would be in a position to respond. In spite of such reply, in the operative portion of the impugned order, the following finding was recorded:
“The tax payer has not produced any specific clarification and neither filed any supporting documents for the discrepancy. Due to lack of such documents, the proposal is hereby confirmed.”
As regards defect no.2, the petitioner had stated that zero-rated supplies were made and enclosed relevant invoices. In the operative portion of the order, the following finding was recorded:
“The tax payer has produced only invoice copies. They have not produced SEZ sale agreement copy, purchase order copy, bank statement, Endorsement certificate for the entire value. In the absence of such records, the proposal is hereby confirmed. “
As regards the above defects, it appears that the assessment order was issued without providing a reasonable opportunity to the petitioner to respond to the respective defects by placing relevant documents on record. Solely for such reason, the impugned order calls for interference.
6. At the same time, it should be recognised that such order was issued after an intimation and the show cause notice was received by the petitioner. Since the petitioner has not availed of such opportunities and approached this Court after the assessment order was issued, it is just and appropriate that the petitioner be put on terms.
7. On instructions, learned counsel for the petitioner submits that the petitioner is willing to remit 10% of the disputed tax demand as a condition for remand.
8. Therefore, the impugned order dated 20.12.2023 is set aside and the matter is remanded for reconsideration subject to the condition that the petitioner remits 10% of the disputed tax demand as agreed to within a period of two weeks from the date of receipt of a copy of this order. Within the aforesaid period, the petitioner is also permitted to submit additional documents in support of the reply to the show cause notice. Upon receipt of the petitioner’s reply and upon being satisfied that the 10% of the disputed tax demand was received, the assessing officer 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 the petitioner’s reply.
9. 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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