Case Law Details
Tvl. Devi Vs Deputy State Tax Officer (Madras High Court)
The case of Tvl. Devi versus Deputy State Tax Officer-1 before the Madras High Court revolves around an order dated 04.08.2023, which is contested by the petitioner on the grounds of denial of a reasonable opportunity. The petitioner, engaged in the business of dealing in construction material, received a show cause notice dated 06.2023, to which they replied on 25.07.2023, stating that a commercial vehicle was purchased.
The petitioner’s argument hinges on the assertion that the commercial vehicle, a tipper lorry, was acquired in the course of business and thus qualifies for Input Tax Credit (ITC) under applicable GST laws. However, they claim that their response was disregarded in the impugned order, which failed to consider the evidence presented in the form of an invoice. The petitioner seeks an opportunity to demonstrate to the respondent that they were indeed entitled to ITC for the purchase.
In response, Mr. V. Prashanth Kiran, learned Government Advocate, representing the respondent, contends that since the petitioner replied to the show cause notice without providing supporting documents, they are not entitled to further consideration. He argues that the petitioner cannot claim ignorance of the proceedings and therefore does not merit another opportunity.
The petitioner’s initial reply to the show cause notice simply stated, “Commercial vehicle lorry purchased furtherance of business,” without uploading any supporting documents. Consequently, they failed to substantiate their claim that the purchase was made in furtherance of business and fell outside the scope of relevant GST laws. However, the petitioner has since provided the relevant invoice and reiterated that the purchase was indeed for business purposes as they are dealers in construction material.
The court observes that while the petitioner initially failed to provide adequate documentation to support their claim, the subsequent submission of the invoice and the nature of the petitioner’s business warrant granting them another opportunity. Therefore, the impugned order dated 04.08.2023 is set aside, subject to the condition that the petitioner remits 10% of the disputed tax demand within two weeks. Additionally, the petitioner is allowed to submit any additional documents within this period.
Upon receiving the requisite documents and the remittance, the respondent is directed to afford the petitioner a reasonable opportunity, including a personal hearing, and subsequently issue a fresh order within three months. The court emphasizes that this decision is made in the interest of justice, ensuring that the petitioner has a fair chance to present their case.
Consequently, the writ petition is disposed of under the aforementioned terms, with no costs awarded to either party. The connected miscellaneous petitions are also closed accordingly
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
An order in original dated 04.08.2023 is assailed on the ground of denial of reasonable opportunity to the petitioner.
2. The petitioner asserts that she is engaged in the business of dealing in construction material. Upon receipt of show cause notice dated 06.2023, the petitioner replied on 25.07.2023 by stating that a commercial vehicle was purchased.
3. Learned counsel for the petitioner submits that the tipper lorry was purchased in furtherance of business and that such commercial vehicle does not fall within the scope of sub-section (5) of Section 17 of applicable GST enactments. He also points out that the petitioner’s reply to the show cause notice was disregarded while recording conclusions in the impugned order. By placing reliance on the invoice, he seeks an opportunity to persuade the respondent that the petitioner was entitled to ITC in respect of such purchase.
4. Mr. V. Prashanth Kiran, learned Government Advocate, accepts notice for the respondent. Since the petitioner replied to the show cause notice without providing any supporting documents, he contends that the petitioner is not deserving of a further opportunity. He points out that this case is distinguishable in as much as the petitioner cannot claim that he was unaware of proceedings.
5. The petitioner’s reply is on record and reads as follows: “Commercial vehicle lorry purchased furtherance of business”
From the copy of the reply on record, it appears that no documents were uploaded while filing such reply. Therefore, the petitioner undoubtedly failed to substantiate the contention that the purchase was in furtherance of business and outside the scope of sub-section (5) of Section 17 of applicable GST enactments. Nonetheless, the relevant invoice has been placed on record now and the petitioner has asserted that the purchase was in furtherance of business because the petitioner is a dealer in construction material. The interest of justice warrants the provision of an opportunity to the petitioner in these facts and circumstances.
6. Therefore, the impugned order dated 04.08.2023 is set aside on condition that the petitioner remits 10% of the disputed tax demand as agreed to within a period of two weeks from the date of receipt of a copy of this order. The petitioner is also permitted to submit any additional documents within the aforesaid period. Upon receipt of such documents and upon being satisfied that 10% of the disputed tax demand was received, the respondent is directed to provide a reasonable opportunity to the petitioner, including a personal hearing, and thereafter issue a fresh order within three months from the date of receipt of additional documents from the petitioner.
7. The writ petition is disposed of on the above terms without any order as to costs. Consequently, connected miscellaneous petitions are closed.
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