Case Law Details
Showkathhussain Mohamedismaile Vs Deputy State Tax Officer (Madras High Court)
The petitioner challenged an assessment order dated 25.12.2023 on the ground that it was passed in breach of the principles of natural justice. The petitioner’s GST registration had been cancelled with effect from 30.03.2019, and it was contended that the notices preceding the assessment order, as well as the impugned order itself, were only uploaded on the GST portal and were not served through any other mode.
The petitioner submitted that, since the GST registration stood cancelled from 30.03.2019 and no business activities were being carried on, the petitioner was not monitoring the GST portal. It was also pointed out that Reminder-1 dated 20.12.2023 required a reply to be submitted on or before 26.12.2023, whereas the assessment order was issued on 25.12.2023, before the expiry of the time granted for response.
The respondent contended that the show cause notice had also been sent to the petitioner by e-mail. The respondent further argued that the petitioner appeared to be accessing the GST portal and was therefore aware of the reminder dated 20.12.2023.
The Court noted that the petitioner had placed on record proof of cancellation of GST registration with effect from 30.03.2019. In such circumstances, the Court observed that a person whose registration had been cancelled could not be expected to monitor the GST portal in the same manner as a registered person. At the same time, the Court took note of the respondent’s submission that the show cause notice had been sent by e-mail and that the petitioner had accessed the portal, as evidenced by the reminder.
During the hearing, the petitioner agreed to remit 10% of the disputed tax demand as a condition for remand.
Considering the facts and circumstances, the Court held that it was appropriate to provide the petitioner with an opportunity to contest the tax demand, subject to conditions. Accordingly, the assessment order dated 25.12.2023 was quashed on the condition that the petitioner remit 10% of the disputed tax demand within fifteen days from receipt of the order. The petitioner was also permitted to submit a reply to the show cause notice within the same period.
The respondent was directed, upon receipt of the reply and verification of payment of 10% of the disputed tax demand, to provide a reasonable opportunity of hearing, including a personal hearing, and thereafter pass a fresh order within two months from receipt of the petitioner’s reply. The writ petition was disposed of on these terms, with no order as to costs.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
An assessment order dated 25.12.2023 is assailed on the ground of breach of principles of natural justice. The petitioner was a registered person under applicable GST enactments until such registration was cancelled with effect from 30.03.2019. The impugned order is assailed on the ground that the notices that preceded such order and the impugned order were uploaded on the GST portal, but not served on the petitioner through any other mode.
2. Learned counsel for the petitioner submits that the petitioner was not monitoring the GST portal since the petitioner’s registration was cancelled with effect from 30.03.2019. It is also stated that the petitioner is not carrying on business at present. Learned counsel also points out that reminder-1 dated 20.12.2023 specifies that a reply should be submitted by the petitioner on or before 26.12.2023, whereas the impugned order was issued on 25.12.2023.
3. Mr. V.Prashanth Kiran, learned Government Advocate, accepts notice for the respondent. He submits that the show cause notice was also served on the petitioner by e-mail. In addition, he points out that the petitioner appears to be accessing the GST portal and, therefore, is aware of reminder-1 dated 20.12.2023.
4. The petitioner has placed on record the document indicating the cancellation of registration with effect from 30.03.2019. Since it appears that the registration was cancelled, it cannot be expected that the petitioner should monitor the GST portal in the same manner as a registered person. However, learned Government Advocate submits, on instructions, that the show cause notice was also sent to the petitioner by e-mail. The petitioner has also placed on record the reminder dated 20.12.2023, which indicates that the petitioner accessed the portal.
5. On instructions, learned counsel for the petitioner agrees to remit 10% of the disputed tax demand as a condition for remand.
6. In the above facts and circumstances, it is just and appropriate that the petitioner be provided an opportunity to contest the tax demand, albeit by putting the petitioner on terms.
7. Therefore, the impugned order is quashed subject to the petitioner remitting 10% of the disputed tax demand as agreed to within fifteen days from the date of receipt of a copy of this order. The petitioner is also permitted to submit a reply to the show cause notice within the aforementioned period. Subject to the receipt of such reply and upon being satisfied that 10% of the disputed tax demand was received, 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 the petitioner’s reply.
8. W.P.No.7999 of 2024 is disposed of on the above terms. No costs. Consequently, W.M.P.Nos.8971 and 8973 of 2024 are closed.
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