Case Law Details
Murugesan Jayalakshmi Vs State Tax Officer (Madras High Court)
Introduction: In a notable judgment by the Madras High Court, the case of Murugesan Jayalakshmi Vs State Tax Officer has brought to light significant procedural concerns within the Goods and Services Tax (GST) framework. This case revolves around the challenge of three separate assessment orders by the proprietrix of M/s. Jayalakshmi Agencies, engaged in the supply of steel and construction materials, on grounds of breach of principles of natural justice.
Detailed Analysis
Background of the Case: The petitioner, unaware of the notices and subsequent assessment orders until receiving oral intimation in December 2023, filed writ petitions challenging the orders dated 08.10.2023. The contention arises from the shift in the GST portal’s operational protocol, where the notices and orders were moved to the ‘View Additional Notices’ tab from the ‘View Notices’ tab, leading to the petitioner’s ignorance of the proceedings.
Legal Arguments and Court’s Observations: The petitioner argued the lack of awareness due to the change in the portal’s dashboard and emphasized the necessity to present documents and possibly cross-examine witnesses for a fair assessment. The respondent, represented by the Additional Government Pleader, argued the petitioner’s negligence in not accessing the portal for a prolonged period and insisted on availing statutory remedies.
The court noted the procedural change in the GST portal and the efforts made by the GST authorities to inform the assessees of the same. Despite this, recognizing the potential breach of natural justice, the court found it essential to provide the petitioner an opportunity to contest the assessment, albeit with conditions.
The Court’s Directive: The Madras High Court quashed the impugned orders, subject to the petitioner remitting 7.5% of the disputed tax demand for each assessment within four weeks. This payment would enable the petitioner to contest the proceedings afresh, with the assessing officer directed to issue new orders after a thorough reconsideration, ensuring the petitioner’s right to a fair hearing is upheld.
Conclusion: The judgment underscores the importance of ensuring procedural fairness in the assessment and collection of taxes, particularly in the digital era where changes to online platforms can inadvertently affect stakeholders’ rights. It highlights the judiciary’s role in balancing the enforcement of tax laws with the protection of taxpayers’ rights against procedural discrepancies. This case serves as a critical reminder for both tax authorities and taxpayers to remain vigilant and informed about procedural updates, ensuring transparency and fairness in tax administration.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
In these three writ petitions, separate assessment orders, each dated 08.10.2023, are assailed.
2. The common petitioner states that she is the proprietrix of M/s.Jayalakshmi Agencies, which is engaged in the business of supply of steel and construction materials. According to the petitioner, she was unaware of the notices and the impugned assessment orders until she received an oral intimation from the office of the respondent in December 2023. In those circumstances, these writ petitions are filed by asserting breach of principles of natural justice.
3. Learned counsel for the petitioner submits that the intimation, show cause notice and assessment orders were posted in the ‘View Additional Notices’ tab on the GST portal. Since such documents were earlier uploaded on the ‘View Notices’ tab on the portal, it is stated that the petitioner was unaware of the proceedings. Learned counsel further submits that the matter relates to reversal of Input Tax Credit (ITC) and that it would be necessary for the petitioner to place relevant documents on record and, if necessary, cross-examine persons whose statements were relied upon by the assessing officer. Therefore, he submits that the appellate remedy would be inadequate for such purpose.
4. Mr. C.Harsha Raj, learned Additional Government Pleader, accepts notice on behalf of the respondent. By pointing out that the intimation was issued on 21.03.2023, the show cause notice on 10.04.2023 and the impugned order on 08.10.2023, he submits that the explanation provided by the petitioner cannot be accepted. As a registered person under the GST regime, learned Additional Government Pleader submits that the petitioner cannot be excused for not accessing the portal for almost nine months. He further submits that the petitioner should be directed to avail of the statutory remedy.
5. The documents on record disclose that the respondent issued both an intimation in Form GST DRC-01A and the show cause notice in Form GST DRC-01 and reminders before issuing the impugned assessment orders. Admittedly, these notices and assessment orders were uploaded on the ‘View Additional Notices’ tab in the GST portal. Earlier, such notices and orders were uploaded on the ‘View Notices’ tab. It was also brought to my notice that the GST authorities have redesigned the dashboard of the portal in January 2024 and clearly specified the type of notices and orders which may be viewed under the ‘View Notices’ tab and the ‘View Additional Notices’ tab.
6. In the above circumstances, solely with a view to provide an opportunity to the assessee to contest the proceedings, the impugned orders call for interference, albeit by putting the petitioner on terms.
7. Therefore, the orders impugned herein are quashed subject to the condition that the petitioner remits sums equal to 7.5% of the disputed tax demand under each assessment order within a period of four weeks from the date of receipt of a copy of this order. Subject to the receipt of such sums, the assessing officer is directed to reconsider the matter after providing a reasonable opportunity to the petitioner, including a personal. In the event of default in complying with the above condition, it will be open to the petitioner to initiate recovery proceedings in terms of the impugned assessment orders. If the condition is complied with, the assessing officer is directed to issue fresh assessment orders within a period of four weeks from the date of receipt of fulfillment of the condition by the petitioner.
8. The writ petitions are disposed of on the above terms. There will be no order as to costs. Consequently, connected miscellaneous petitions are closed
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