Sri Maruthi Enterprises Vs Deputy State Tax Officer – II (Madras High Court)
The Madras High Court addressed a writ petition challenging a GST assessment order issued to Sri Maruthi Enterprises, a civil contractor. The petitioner argued that the assessment, based on discrepancies between filed returns and Form 26AS receipts, was flawed. They contended that Form 26AS, detailing TDS/TCS deductions, shouldn’t be the sole basis for determining taxable turnover. The petitioner also highlighted that despite submitting relevant documents like audited financial statements and GST returns, no personal hearing was granted. This, they argued, prevented them from explaining the discrepancies and clarifying their financial position. The petitioner also raised the issue of limitation on the assessment proceedings.
The court acknowledged that while a show-cause notice offering a personal hearing was issued, the final assessment order indicated no hearing took place. Given the nature of civil contracting, where payments like mobilization advances and running account bills are common, the court deemed a personal hearing essential. The court found that the assessing officer had disregarded the petitioner’s explanation regarding Form 26AS, leading to an unfair assessment. To ensure fairness, the court quashed the assessment order, subject to the petitioner depositing 10% of the disputed tax demand within two weeks. Upon confirmation of this deposit, the assessing officer was directed to grant a reasonable opportunity, including a personal hearing, and issue a fresh assessment order within two months. The petitioner was also allowed to submit additional documents. The court emphasized the importance of providing a fair hearing and considering all relevant documents before finalizing the assessment.
