Case Law Details
AKM Beverages and Manikandan Contractor Vs Assistant Commissioner (ST) (Madras High Court)
Madras High Court has set aside the GST demand orders issued against AKM Beverages and Manikandan Contractor, ruling that the orders were passed ex parte without affording the petitioner an opportunity to respond. The case challenged the orders dated December 27, 2023, on the grounds that the notices were only uploaded on the GST portal and were not directly served to the petitioner. As a result, the petitioner remained unaware of the proceedings and could not submit a reply or appear for a hearing. The court ruled that this failure to ensure proper service of notices amounted to a violation of the principles of natural justice.
The petitioner had voluntarily paid Rs. 22,34,326 before the issuance of the impugned order, while the tax liability assessed in the order was Rs. 16,80,931. The respondent’s counsel acknowledged this payment and stated that the matter could be addressed according to the law. The court noted that since the orders were issued without direct notice, the proceedings were effectively held behind the petitioner’s back. Citing procedural irregularities, the court deemed the orders void and remanded the matter for fresh consideration.
The Madras High Court directed the petitioner to submit a fresh reply with supporting documents within two weeks. The tax authority must then provide a clear 14-day notice for a personal hearing before passing a final order. This ruling underscores the importance of procedural fairness in tax matters and the necessity of serving notices through proper channels to ensure taxpayer rights are protected.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
Heard Mr. Joseph Prabakar, learned counsel appearing for the petitioner and Mrs. K. Vasanthamala, learned Government Advocate (T), who takes notice on behalf of the respondents. With consent, the main Writ Petition is taken up for final disposal at the stage of admission itself.
2. The challenge in this Writ Petition is to the order dated 27.12.2023 and the summary of the order dated 27.12.2023, issued by the second respondent and to quash the same as arbitrary.
3. The learned counsel for the petitioner would submit that all the notices/communications, which culminated in the impugned orders were merely uploaded in the GST portal, which, the petitioner has no occasion to view the same, therefore, the petitioner could not file reply nor appear for the personal hearing, however, the second respondent, without waiting for the petitioner’s reply, and without hearing the petitioner, passed the impugned orders, which are nothing but ex parte orders, as the same suffer from violation of principles of natural justice.
3.1 The learned counsel would further submit that the petitioner has voluntary payment of a sum of Rs.22,34,326/-, even before the impugned order has been passed, hence, he prays for setting aside the impugned orders.
4. The learned Government Advocate (T) for the respondents fairly submitted that since it is stated by the learned counsel for the petitioner that the petitioner had already deposited a sum of Rs.22,34,326/- and by virtue of the impugned order, the tax amount, which the petitioner is liable to pay, comes around only to a sum of Rs.16,80,931, subject to the verification of such payment made by the petitioner, the matter would be dealt with by the respondents in accordance with law.
5. I have given due considerations to the submissions made on either side and perused the materials available on record.
6. On perusal of records, it is crystal clear that the impugned orders came to be passed against the petitioner, behind their back, as the respondent-Department has not taken any steps to serve any notices/communications, which culminated in the impugned orders directly through physical mode of service and made it available only in the GST Portal under the “View of additional notices and orders’ column, which, the petitioner was not aware and ultimately, the impugned orders came to be passed against the petitioner without even affording any opportunity of hearing to the petitioner, which is nothing but ex parte orders as the same suffer from violation of principles of natural justice. Therefore, this Court is inclined to set aside the impugned orders and remand the matter back to the respondent for fresh consideration, however, the same is subject to the verification of the statement made by the petitioner that he has already deposited a sum of Rs.22,34,326/- as against the tax liability of Rs.16,80,931.
7. Accordingly, this Court passes the following orders/direction:-
i) The impugned order dated 27.12.2023 and the consequential order 27.12.2023 are set aside, subject to the verification of the statement made by the petitioner that he has already deposited a sum of Rs.22,34,326/-against the tax liability of Rs.16,80,931.
ii) Consequently, the matters are remanded to the second respondent for fresh consideration.
iii) The petitioner is directed to file reply along with supportive documents within a period of two weeks from the date of receipt of a certified copy of this order.
iv) Thereupon, the second respondent is directed to consider the same and shall issue a clear 14 days notice affording an opportunity of personal hearing to the petitioner, and after verification of the submission made by the petitioner that has deposited a sum of Rs.22,34,326/- against the tax liability of Rs.16,80,931, he shall decide the matter in accordance with law.
8. In the result, the Writ Petition is allowed on the aforesaid terms.
No costs. Consequently, connected Miscellaneous Petitions are closed.
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