Madras HC quashed GST order passed by State Tax Officer not having Authority to Pass order

Srinithi Enterprises Private Limited Vs State Tax Officer (Intelligence) (Madras High Court)

The Madras High Court addressed two Writ Petitions from Srinithi Enterprises challenging an assessment and rectification order issued by the State Tax Officer (Intelligence). The petitioners argued that the assessment order was invalid as it was issued by an officer not authorized under Circulars No.72/2019 and No.23/2021, which restricted the State Tax Officer’s powers. Additionally, they contended that the revenue effect of the case exceeded the ₹2 crore limit specified for the State Tax Officer’s jurisdiction, meaning only an Assistant Commissioner could lawfully issue the order. The Court agreed with the petitioners’ arguments, finding that the State Tax Officer acted beyond their authority and violated natural justice principles. Consequently, the Court quashed the impugned orders and directed the case to be reviewed by the Assistant Commissioner of GST and Central Excise, who is to issue a new decision within three months. The Writ Petitions were allowed, and the connected miscellaneous petitions were closed. Also Read: Madras HC Clarifies Jurisdiction in GST Adjudication Orders

FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT

Since the issue involved in these Writ Petitions are similar in nature both the writ petitions are taken up together and disposed of by a Common order.

2. These Writ Petitions have been filed to quash the impugned Assessment order and the impugned rectification order on two grounds.

3. Heard Mr.Hari Radhakrishnan, the Learned counsel appearing on the petitioner and Mr.A.K.Manikkam, the Learned Special Government Pleader appearing on the respondents. Perused the material documents available on record.

4. The impugned order was passed by the 1^st Respondent/State Tax Officer (Intelligence). As per Circular No.72/2019 dated 31.05.2019 and Circular No.23/2021 dated 04.10.2021, the 1^st respondent has no empower to pass assessment order, but the 1^st respondent had passed the impugned assessment order. Since the 1^st respondent has passed the impugned order, it will be violated the principles of natural justice. However, the Learned Special Government Pleader appearing for the respondents submitted that the Circular was passed, subsequently, the Assessment order was passed prior to that.

5. The next ground that was raised by the petitioner is that there is a pecuniary jurisdiction fixed as per Circular, dated 08.11.2022. In the said Circular, only the Assistant Commissioner is having jurisdiction, wherever, the revenue effect exceeds Rs.2 Crore. The State Tax Officer is having jurisdiction upto Rs.2 Crore. In the present, the revenue effect is beyond Rs.2 Crores and therefore, only the Assistant Commissioner is having power to pass the Assessment order. Therefore, this Court is of the considered opinion that based on the second contention the impugned order is liable to be quashed and accordingly quashed. This Court Suo Motu implead the Assistant Commissioner of GST and Central Excise, as 2^nd respondent.

6. These matters are remitted back to the 2^nd respondent/Assistant Commissioner. The 2^nd respondent is directed to consider the petitioners’ case and pass orders, within a period of 3 months from the date of receipt of a copy of the order.

7. With the above said observations and directions, these Writ Petitions are allowed. No Costs. Consequently, connected miscellaneous petitions are closed.