Orders signed by same officer in dual capacity not maintainable: Madras HC

S R. S. Constructions Vs State Tax Officer (Data Analytics) (Madras High Court)

Summary: In the case of M/s S.R.S. Constructions v. The State Tax Officer (Data Analytics), the Madras High Court addressed procedural irregularities in the assessment orders issued under the Central Goods and Services Act, 2017 (CGST Act). The Petitioner challenged assessment orders dated February 23, 2024, for the assessment years 2020-21 and 2021-22, which were signed by the same officer, L. Kumaresan, acting in dual roles as both the State Tax Officer (Data Analytics) and the Commercial Tax Officer. The Petitioner argued that the orders were biased due to this dual capacity, raising concerns about fairness and impartiality. The Court found that the Government Advocate could not provide a satisfactory explanation for the officer’s dual signing of the orders, indicating a lack of procedural integrity. This led the Court to set aside the impugned orders and remand the case for fresh consideration, ensuring that the Petitioner would be heard before any new decisions were made. The judgment emphasizes the importance of maintaining clear and unbiased administrative processes, highlighting that orders signed by an officer in conflicting capacities are not legally maintainable. This case serves as a reminder of the necessity for transparency and accountability in tax assessments and administrative actions.

Introduction: The Hon’ble Madras High Court in the case of M/s S.R.S. Construction v. The State Tax Officer (Data Analytics) [Writ Petition (MD) Nos. 16214 & 16276 of 2024 dated July 19, 2024] set aside the orders which have been signed by the same officer in dual capacity, holding that such orders are liable to be set aside.

Facts:

M/s S.R.S. Construction (“the Petitioner”) had challenged the Assessment Orders dated February 23, 2024 (“the Impugned Order”) passed under Section 74 of the Central Goods and Services Act, 2017 (“the CGST Act”) for the assessment years 2020-21 and 2021-22 (“the Impugned Period”) Impugned Orders were passed by the same individual in the capacity as State Tax Officer (Data Analytics) (Intelligence Wing), Virudhunagar and Commercial Tax Officer.

Held:

The Hon’ble Madras High Court in the case of [Writ Petition (MD) Nos. 16214 & 16276 of 2024 taking into consideration the fact that the Department is not in a position to clarify as why the same officer has signed the respective Impugned Order under two different heads, thereby, the Impugned Orders was set aside the matter was remitted back for reconsideration.

FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT

By this common order, these two Writ Petitions are disposed of.

2. Heard learned counsel for the petitioner and learned Government Advocate for the respondents.

3. The petitioner is before this Court against the respective assessment orders both dated 23.02.2024 passed by the first respondent for the assessment years 2020-21 and 2021-22. The challenge in the impugned order is that the same individual namely, L. Kumaresan has passed the impugned orders for the respective assessment years.

4. It is submitted that the same Officer has issued the summary of the orders in GST DRC 07 for the respective assessment years and has signed in the capacity of Commercial Tax Officer and has also issued Section 74 notices for the 3/7 respective assessment years as the Commercial Tax Officer. It is submitted that the impugned orders dated 23.02.2024 for the respective assessment years were issued by the same individual in the capacity as the State Tax Officer (Data Analytics) (Intelligence Wing), Virudhunagar.

5. The learned counsel for the petitioner in these Writ Petitions would submit that the impugned orders have been passed in a biased manner as the same Officer has assumed dual role both as the Commercial Tax Officer and the State Tax Officer (Data Analytics) (Intelligence Wing), Virudhunagar.

6. It is further submitted that there is a patent bias writ at large. That apart, it is submitted that the said Officer had already been transferred as early as 02.08.2023, but, has passed the impugned orders in dual capacity as mentioned above.

7. The learned Government Advocate for the respondents is unable to explain as to why the same officer has signed in two different capacity, one as the Commercial Tax Officer, Tirunelveli and another as the State Tax Officer, (Data Analytics) (Intelligence Wing), Virudhunagar for the respective years. Prima facie, there is a discrepancy as the same officer is wearing two heads.

8. Since there is no proper explanation, the Court is inclined to set aside the impugned orders and remit the cases back to the second respondent to pass fresh orders on merits and in accordance with law as expeditiously as possible preferably within a period two months. Needless to state, the petitioner shall be heard, before passing the orders. The petitioner shall co-operate with the second respondent. In case, the petitioner fails to co-operate with the second respondent, the respondents are at liberty to proceed against the petitioner based on the available materials on record.

These Writ Petitions are disposed of with above directions. No costs. Consequently, connected miscellaneous petitions are closed.

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