Case Law Details
Ralco Synergy Pvt. Ltd Vs Joint Commissioner of State Tax (Madras High Court)
Introduction: In a recent case, Ralco Synergy Pvt. Ltd. challenged an assessment order issued by the State GST Authority, citing violations of natural justice and jurisdictional errors. The Madras High Court’s judgment addresses the legality of the demand order and directs a fresh assessment.
Detailed Analysis: The petitioner contested the assessment order primarily on the grounds of jurisdictional issues and procedural irregularities. The assessment stemmed from an inspection conducted by the respondent in November 2022, leading to an intimation and subsequent show cause notice to the petitioner. However, the petitioner alleges that the tax imposition was based on incorrect calculations, considering the total turnover instead of the declared turnover for Tamil Nadu alone. Additionally, discrepancies were noted in assessing GST based on the petitioner’s all India transactions.
While the State Tax Officer was not initially named as a party, the court suo motu included them. Upon examination, the court found that the assessment order failed to reflect a thorough consideration of the petitioner’s financial details, indicating a lack of due diligence. Despite this, the court acknowledged that the petitioner failed to respond to the show cause notice and participate in the proceedings, contributing to the negligence.
To address the situation, the court quashed the assessment order with the condition that the petitioner remits 5% of the disputed tax demand. The petitioner was also granted two weeks to respond to the show cause notice and provide the required payment. Upon satisfaction of these conditions, the assessing officer was directed to conduct a fresh assessment within two months, ensuring compliance with legal standards.
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