Case Law Details

Case Name : East Coast Constructions and Industries Limited Vs Assistant Commissioner (Madras High Court)
Appeal Number : W.P.No.26457 of 2023
Date of Judgement/Order : 11/09/2023
Related Assessment Year :

East Coast Constructions and Industries Limited Vs Assistant Commissioner (Madras High Court)

The Hon’ble Madras High Court in the case of East Coast Constructions and Industries Ltd. v. Assistant Commissioner [W.P. No. 26457 of 2023 dated September 11, 2023] allowed the writ petition by setting aside the Impugned Order and remanded back the matter to Appellate Authority thereby holding that, the Petitioner deserves a fair chance as the Petitioner failed to acknowledge the notice issued due to issuance of notice in different option on GST dashboard. The High Court also directed the Revenue Department to address the issues arising out of hosting information in the Menu in the Dashboard for “View Additional Notices and Orders” when already there is another drop Menu for “View Notices and Orders”, which was all along since inception and used for communicating notices in various forms and orders.

Facts:

East Coast Constructions and Industries Ltd. (“the Petitioner”) aggrieved by the Assessment Order dated May 8, 2023, (“the Impugned Order”) passed by the Revenue Department (“the Respondent”) as the Petitioner did not reply to the notices issued vide Form GST DRC-01A and Form GST DRC-01.

Aggrieved by the Impugned Order, the Petitioner filed a writ petition contending that, the Petitioner failed to notice the notices in Form GST DRC-01A and Form GST DRC-01. Earlier, the inception of GST, the notices/communications were hosted in “View Notices and Orders”. However, as of now, the Respondent has started hosting the notices/communications in “View Additional Notices and Orders”.

Issue:

Whether the Order is liable to be set aside due to technical issues in GST Portal?

Held:

The Hon’ble Madras High Court in the case of W.P. No. 26457 of 2023 held as under:

  • Noted that, the Petitioner deserves a fair chance to address the discrepancy pointed out in Form GSTR-1 and Form GSTR-3B, as pointed out in Form ASMT-10.
  • Opined that, the Court is not inclined to direct the Petitioner to approach the Respondent Appellate Authority as the matter requires a proper consideration.
  • Held that, the Impugned Order is set aside and case is remitted back to the Respondent authority for passing fresh orders on merit in accordance with law within a period of three months.
  • Directed that, the Respondent authority shall address the issues arising out of hosting of information in the Menu in Dashboard for “View Additional Notices and Orders” when already there is another drop Menu for “View Notices and Orders”, which was all along since inception used for communicating notices in various forms and orders

Our Comments:

Recently, the Hon’ble Allahabad High Court in the case of Harbir Singh Contractor v. Union of India and Ors. [Writ Tax No. 454 of 2020 dated October 26, 2023] allowed the writ petition thereby holding that the Petitioner is entitled to remedy when damage is caused to the Assessee due to inadvertent machine errors, observing that, the procedural laws are brought to life by the rules which are enabled to work efficiently through machine process.

Conclusion: This judgment highlights the judiciary’s sensitivity to technical challenges faced by taxpayers on the GST portal. The court’s decision to set aside the assessment order reflects a commitment to fairness and the importance of transparent communication. As businesses navigate complex GST compliance, this case serves as a reminder of the significance of a user-friendly and reliable digital infrastructure.

By shedding light on the Madras High Court’s stance in East Coast Constructions and Industries Ltd. vs. Assistant Commissioner, this article provides insights into the evolving landscape of GST assessments and the role of technology in shaping taxpayer experiences.

FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT

Mr. C. Harsharaj, learned Additional Government Pleader takes notice on behalf of the respondent.

2. The petitioner is aggrieved by the impugned Assessment Order bearing Ref.No.ZD330523028142Y dated 08.05.2023.

3. The impugned Assessment Order has preceded the following notices:-

(i) Notice in Form GST ASMT-10 dated 21.03.2022.

(ii) Notice in Form GST DRC-01A dated 19.08.2022.

(iii) Notice in Form GST DRC-01 dated 27.10.2022.

4. The petitioner has not replied to the notices in Form GST DRC-01A and Form GST DRC-01 and therefore, the impugned Assessment Order has been passed on 08.05.2023.

5. The grievance of the petitioner is that right from the inception of GST with effect from 01.07.2017 all along notices/communications were sent/hosted to the petitioner’s Dashboard meant for “View Notices and Orders”. However, of late, the respondent has started hosting these notices/communications in “View Additional Notices and Orders” in the Dashboard and thus, the petitioner has failed to notice the notices in Form GST DRC-01A and Form GST DRC-01 dated 19.08.2022 and 27.10.2022.

6. The learned Additional Government Pleader for the respondent would submit that the writ petition is devoid of merits and is therefore liable to be dismissed as there is a proper communication of notices in accordance with Section 169 of the Tamil Nadu Goods and Services Tax (TNGST) Act, 2017.

7. The learned Additional Government Pleader would further submit that the petitioner be allowed to work out its remedy before the Appellate Authority under Section 107 of the TNGST Act, 2017.

8. That apart, it is submitted that the notices in Form GST DRC-01 dated 27.10.2022 is categorical wherein, it has specified the date within which, the petitioner has to reply i.e., “Date by which reply has to be submitted” by 28.11.2022. It is submitted that the petitioner could have replied to the same within such time.

9. The learned Additional Government Pleader further submitted that the notices in Form GST DRC-01A and Form GST DRC-01 dated 19.08.2022 and 27.10.2022 were also sent to the petitioner through post, although the same is not required under Section 169 of the TNGST Act, 2017. Hence, prays for dismissal of the writ petition.

10. I have considered the arguments advanced by the learned counsel for the petitioner and the learned Additional Government Pleader for the respondent.

11. The dispute in on account of mismatch between the details in Form GSTR-1 and Form GSTR-3B. The discrepancy appears to arises on account of the amount deducted by the deductor and declared in Form GSTR-7 which requires to be explained by the petitioner.

12. Court is of the view, the petitioner therefore deserves a fair chance as admittedly there appears to be a discrepancy in the turn over pointed out in Form GST ASMT-10 dated 21.03.2022. and in Form GSTR-1 and Form GSTR-3B.

13. Therefore, Court is not inclined to direct the petitioner to approach the Appellate Authority as the matter would require a proper consideration, so that in case of any other discrepancy, the matter can be later decided in hierarchy of the Appellate Forum prescribed under the TNGST Act, 2017.

14. Considering the above, the impugned order is set aside and the case is remitted back to the respondent to pass a fresh order on merits and in accordance with law within a period of three months from the date of receipt of a copy of this order.

15. The respondent is also directed to address the issue arising out of the hosting of information in the Menu in Dashboard for “View Additional Notices and Orders” when already there is another drop Menu for “View Notices and Orders”, which was all along since inception used for communicating notices in various forms and orders.

16. This Writ Petition is disposed of with the above observations. No costs. Consequently, connected Writ Miscellaneous Petitions are closed.

(Author can be reached at info@a2ztaxcorp.com)

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