Polyglass Acrylic Mfg Co PVT LTD vs. State Of Gujarat Through Government Pleader

Held

The Court held that the assessment proceedings were conducted ex-parte, and the petitioner claimed non-receipt of notices. Given the significant demand raised and the arguable points against the adjudication order, the Court decided to remit the proceedings back to the Assessing Officer for fresh consideration. The Court reasoned that the ex-parte assessment, leading to a substantial demand, necessitated a fresh hearing. The Court quashed and set aside the assessment order dated March 30, 2017. The petitioner was directed to appear before the Assessing Officer on December 17, 2018, personally or through an authorized representative, for the first hearing. The petitioner was also directed to pay costs of Rs. 50,000 to the respondents for non-appearance in past proceedings despite alleged service of notices. The issue of pre-deposit for appeals was implicitly rendered moot by the quashing of the assessment order.

Facts

The petitioner, Polyglass Acrylic Mfg Co Pvt Ltd, challenged orders of the Gujarat Value Added Tax Tribunal, the first appellate authority, and the assessment order. The petitioner's registration was cancelled due to business closure in March 2015. Assessment proceedings were conducted ex-parte as the petitioner claimed not to have received notices. The assessment order dated March 30, 2017, disallowed input tax credit of Rs. 77,66,728, leading to a total demand of Rs. 2,49,05,537, including tax, interest, and penalty. The first appellate authority dismissed the petitioner's appeals for non-compliance with a pre-deposit direction of Rs. 25,00,000. The Tribunal also dismissed the second appeals on the same grounds, despite not directing pre-deposit for the Central Sales Tax Act appeal.

Key Issues

1. Whether the assessment order dated 30.03.2017, passed ex-parte, is sustainable in law, considering the petitioner's claim of non-receipt of notices and the disallowance of input tax credit. The petitioner argued that the Assessing Officer failed to consider the input tax credit of Rs. 77,66,728, which, if considered, would have negated the GST liability. The petitioner also contended that on grounds of parity, as a vendor was permitted to prosecute an appeal without pre-deposit, they should also be allowed to do so. The revenue argued that the appellate authorities exercised their discretion in directing pre-deposit and that there was no infirmity in the impugned orders warranting interference by the High Court.