Case Law Details
Tvl. Chellam Motors Private Limited Vs State Tax Officer-V (Roving Squad) (Madras High Court)
Madras High Court has quashed an assessment order issued against Tvl. Chellam Motors Private Limited by the State Tax Officer-V (Roving Squad), citing procedural irregularities. The petitioner challenged the assessment order for the financial year 2019-20, arguing that the assessing officer failed to comply with Section 74 of the Tamil Nadu Goods and Services Tax Act, 2017 (TNGST Act). Section 74 mandates the assessing officer to determine the tax payable based on the proposals outlined in the show cause notice. Additionally, the petitioner contended that the officer disregarded the guidelines outlined in Circular No. 8/2024, dated August 29, 2024, issued by the Commissioner of State Tax, Commercial Taxes Department, Chennai.
Upon reviewing the impugned order, the High Court found that the assessing officer had indeed not determined the tax payable as required under Section 74 of the TNGST Act, nor had they adhered to the instructions in the aforementioned circular. The court concluded that this procedural lapse rendered the order arbitrary and thus liable to be set aside. Consequently, the court allowed the writ petition and remitted the matter back to the first respondent, the State Tax Officer-V, for fresh consideration. The court directed Tvl. Chellam Motors to file their reply and supporting documents within two weeks of receiving a copy of the order. Following this, the respondent was instructed to provide the petitioner with an opportunity for a hearing and to pass a reasoned order on the merits of the case, in accordance with the law, within eight weeks. This decision emphasizes the importance of adherence to statutory procedures and administrative guidelines in tax assessments, ensuring fairness and transparency in such proceedings. The court closed the connected miscellaneous petitions and specified that there would be no order as to costs.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
The challenge in the writ petition is to the assessment order of the year 2019-20.
2. The Primordial contention of the learned counsel for the petitioner is that neither the provisions of Section 74 of the Tamil Nadu Goods and Services Tax Act, 2017 (hereinafter referred to as “the Act”) which envisages a determination by the Assessing Officer of the proposal made under the show cause notice has been invoked, nor the circular issued by the Commissioner, State Tax, Commercial Taxes Department, Ezhilagam, Chennai, in Circular No.8/2024, dated 29.08.2024 has been followed by the Assessing Officer while issuing the order of demand.
3. A perusal of the order impugned herein would also show that the Assessing Officer had not made any determination of the tax payable by the petitioner as envisaged under Section 74 of the Act, nor has followed the guidelines issued in Circular dated 29.08.2024 of the Commissioner of State Tax. In such view of the matter, I am of the view that the order impugned suffers from vice of arbitrariness. For the said reason, the order impugned is liable to be interfered with.
4. In fine, this Writ Petition is allowed, the impugned order is set aside and the matter is remitted back to the first respondent for fresh consideration. The petitioner shall file his reply along with supporting documents within a period of two weeks from the date of receipt of a copy of this order and thereafter, the first respondent shall provide an opportunity of hearing to the petitioner and pass a reasoned order on merits and in accordance with law within a period of eight weeks thereafter. There shall be no order as to costs. Consequently, connected miscellaneous petitions are closed.
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