Case Law Details
Sri Om Sakthi Traders Vs State Tax Officer (Intelligence) (Madras High Court)
The Madras High Court disposed of two writ petitions challenging assessment orders dated 28.08.2024 passed under Section 74 of the respective GST enactments for the tax periods 2022-23 and 2023-24, along with the consequential rectification orders dated 23.12.2024 passed under Section 161, whereby the petitioner’s rectification applications had been rejected.
The Court noted that the writ petitions had been filed on 07.01.2025, which was within the condonable period of limitation prescribed under Section 107 of the respective GST enactments.
The Court observed that, in similar circumstances, assessment orders had been quashed and matters remitted to the adjudicating authority, subject to assessees depositing 10% to 100% of the disputed tax, depending upon the length of delay in approaching the Court. The Court found no reason to adopt a different approach in the present case.
To balance the interests of both the petitioner and the Revenue, the Court quashed the impugned proceedings and remitted the matters to the respondent for passing fresh orders, subject to the petitioner depositing 10% of the disputed tax in cash from its Electronic Cash Register within 30 days from the date of receipt of a copy of the order.
The Court further directed that, within the same period, the petitioner should file replies to the GST DRC-01 Show Cause Notices dated 19.06.2024, together with the necessary supporting documents. The Court directed that the impugned assessment orders dated 28.08.2024 should be treated as an addendum to the respective show cause notices.
The Court directed that, upon compliance with these conditions, the respondent should pass fresh orders on merits and in accordance with law, preferably within three months from the date of receipt of the reply and pre-deposit.
The Court also ordered that, subject to compliance with the stipulated conditions, any attachment of the petitioner’s bank account would stand automatically raised or vacated. It clarified that the bank attachment would be lifted upon deposit of 10% of the disputed tax, provided that no other amounts remained in arrears apart from the demand under the impugned assessment orders dated 28.08.2024.
The Court further directed that, if the petitioner failed to comply with any of the stipulated conditions, the respondent would be at liberty to recover the tax in accordance with law as though the writ petitions had been dismissed in limine. Before passing any such order, the respondent was directed to give due notice to the petitioner.
Accordingly, the writ petitions were disposed of with the above directions. No order as to costs was made, and the connected miscellaneous petitions were closed.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
Both these writ petitions are being disposed of, after hearing the learned counsel for the petitioner and the learned Special Government Pleader for the respondent.
2. In these writ petitions, the petitioner has challenged the impugned orders both dated 28.08.2024, passed under Section 74 of the respective GST Enactments along with the consequential Rectification orders both dated 23.12.2024 passed by the Respondent passed for the tax periods 2022-23 and 2023-24 under Section 161 of the respective GST Enactments, whereby the applications filed for rectification were rejected.
3. Thus, these writ petitions were filed immediately within the condonable period of limitation prescribed under Section 107 of the respective GST Enactments i.e on 07.01.2025.
4. Under similar circumstances, Orders have been quashed and cases have been remitted back to the respondent to pass a fresh order on terms subject to such Assessee depositing 10% to 100% of the disputed tax depending upon the length of delay in approaching the Court. I do not find any reason to take a different view in this case.
5. Therefore, to balance the interest of both parties viz., the Assessee and the Revenue, the cases are remitted back to the Respondent to pass fresh orders subject to the Petitioner depositing 10% of the disputed tax in cash from the Petitioner’s Electronic Cash Register within a period of thirty (30) days from the date of receipt of a copy of this order.
6. Within such time, the Petitioner shall also file a reply to the Show Cause Notices in GST DRC-01 both dated 19.06.2024 together with requisite documents to substantiate the case by treating the impugned Assessment Orders both dated 28.08.2024 as an addendum to the Show Cause Notices both dated 19.06.2024.
7. In case the Petitioner complies with the above stipulations, the Respondent shall proceed to pass final orders on merits and in accordance with law as expeditiously as possible, preferably, within a period of three (3) months of such reply/pre-deposit. Subject to the Petitioner complying with the above stipulations, if any attachment of the bank account of the Petitioner shall also stand automatically raised/vacated.
8. It is made clear that bank attachment shall be lifted subject to the deposit of 10% of disputed tax as ordered above and no other amount is in arrears barring the amount demanded under the impugned orders dated 28.08.2024.
9. In case the Petitioner fails to comply with any of the stipulations, the Respondent is at liberty to proceed against the Petitioner to recover the tax in accordance with law as if these Writ Petitions were dismissed in limine today.
10. Needless to state, before passing any such order, the Respondent shall give due notice to the Petitioner.
11. These writ petitions stand disposed of with the aforesaid observations. However, there shall be no order as to costs. Consequently, connected miscellaneous petitions are closed.
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