M/S Tra And Company vs. Additional Chief Secretary TO Government
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Cause title — parties, addresses and appearances
WRIT OR ORDER; QUASH THE IMPUGNED ORDER NO.JCCT/VIG/DCCT/INS01/2020-21 DATED 05.01.2021 PASSED BY THE R-4 U/S 64(1) OF THE GST ACT, LEVYING TAX AND INTERST AS PER ANNEXURE-A2 BY ISSUING WRIT; QUASH THE IMPUGNED ORDER NO. JCCT/ VIG/DCCT/ INS01/ 2020-21 DATED 05.01.2021 ISSUED BY THE R-4 U/S 122(1) AND (2) OF THE GST ACTS, LEVYING PENALTY AS PER ANNEXURE-A3; QUASH THE IMPUGNED ORDER NO.JCCT/VIG/DCCT /INS-01 / 2020-21 DATED 05.01.2021, ISSUED BY THE R-4 U/S 38(5) OF THE KVAT ACT AS PER ANNEXURE-A4; DIRECT THE R-4 TO GIVE SUFFICIENT TIME I.E., ATLEAST FOR A PERIOD OF 60 DAYS FROM THE ISSUE/ RECEIPT OF FRESH SHOW CAUSE NOTICES TO SUBMIT DETAILS OF TRANSACTION.
THIS WRIT PETITION COMING ON FOR PRELIMINARY HEARING IN 'B' GROUP, THIS DAY, THE COURT MADE THE FOLLOWING:
3 O R D E R
The petitioner has impugned the fourth respondent’s order dated 5.1.2021 in No.JCCT/VIG/DCCT/INS01/2020-21 [Annexure - A.2] under Section 64[1] of the Karnataka Goods and Services Tax Act, 2017 (for short, ‘the KGST Act’) and the Central Goods and Services Tax Act, 2017 (for short, ‘the CGST Act’) and the consequential orders dated 5.1.2021 in No.JCCT/VIG/DCCT/INS01/2020-21 under Section 64(1) KGST/CGST Act and under Section 38(5) of the Karnataka Value Added Tax Act, 2003 [for short, ‘the KVAT Act’] read with Section 174 of the KGST & CGST Act [Annexures - A.3 and A.4]. The petitioner has also challenged the subsequent order dated 12.01.2021 by the third respondent in Form - GST ASMT-18 under Section 64[2] of the KGST/CGST Act [Annexure-A.1). The petitioner
4 has alternatively sought for remand of the case for reconsideration by the fourth respondent.
The petitioner and the State have filed elaborate pleadings on different aspects but the petition is taken up for final disposal in the light of the alternative prayer for remand to the fourth respondent. The petitioner’s alternative payer reads as under:- “Alternatively, remand the present matter to the Respondent No.4 and provide 60 days’ time to file reply and an opportunity for a personal hearing.”
The undisputed facts are that the Deputy Commissioner of Commercial Tax, (Vigilance)-1 has searched the petitioner’s premises on 14.8.2020 and has seized certain exhibits. The seized exhibits have been processed over a period of four months. The petitioner
5 has appeared before the concerned during these four months and has either furnished clarification or has sought for extension of time to furnish clarification. The petitioner has last appeared before the concerned on 16.12.2020 during the proceedings when the seized exhibits were being processed. The petitioner is issued with summary assessment notice dated 21.12.2020 on 28.12.2020. The petitioner is allowed 7 [seven] days time to file response and immediately on the expiry of the 7th day, the protective assessment order is passed on 05.01.2021 (Annexure-A.4) under Section 38(5) of the KVAT Act read with section 174 of the KGST/CGST Act.
The learned Counsel for the petitioner submits that the authorities have seized voluminous records and processed the seized exhibits over a period of four months but the
6 petitioner is granted almost 7 days and immediately after the 7th day, the impugned order as per Annexure-A.2 is passed and consequential notices of demand are issued. These material circumstances have not been considered by the third respondent.
The petitioner’s grievance that he did not have reasonable opportunity, must be necessarily examined in the light of the undisputed circumstances and it must be opined that the petitioner ought to have been given a reasonable opportunity [not mere seven days] to satisfy the requirement of a reasonable opportunity of hearing. Therefore, the petitioner’s alternative prayer for remand and reconsideration must be accepted but on terms. It is agreed by the learned counsels that the petitioner furnished a bank guarantee for 10% of the amount in
7 demand and offered certain immovable properties as security for the remaining amount. Hence, the following, ORDER
The petition is allowed in part and the impugned orders/notices as per Annexures – A.1 to A.4 are quashed. The proceedings are restored to the fourth respondent for reconsideration. The petitioner shall file its response to the notice dated 21.12.2020 on or before 25.4.2022. The fourth respondent within the period of eight [8] weeks from 25.4.2022 pass orders under Section 64 of the KGST/CGST Act read with Section 38 of the KVAT Act. The bank guarantee offered shall be extended by the petitioner for the aforesaid period of eight [8] weeks and similarly the security furnished shall also be accordingly extended. The petitioner shall file proof of extension of the bank
8 guarantee and the extension of the security of immovable properties offered along with its response. JUDGE nv
Reproduced from the public record of the Karnataka High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.