M/S. Infosys Limited vs. Deputy Commissioner (St) Stu-Iii And Another

Held

The Court held that the impugned assessment order dated March 31, 2020, passed by the Deputy Commissioner (ST) was in violation of the principles of natural justice. The Court found that the petitioner was denied a proper opportunity to represent its case. The assessment was made on the last day of the limitation period, and the personal hearing was fixed during the lockdown period, compounded by technical glitches that prevented the petitioner from submitting online responses. The Court acknowledged that the lockdown made it impossible for the petitioner's representative to attend the personal hearing. Therefore, the existence of an alternative remedy of appeal was not a bar to invoking the High Court's extraordinary jurisdiction. The Court quashed the assessment order and remitted the matter back to the Deputy Commissioner (ST) to consider it afresh after providing a personal hearing to the petitioner, to be decided within two months of receiving the order. The Court did not explicitly leave any issue undecided, but the core finding was on the violation of natural justice.

Facts

The petitioner, M/s. Infosys Limited, a company engaged in software sales and IT services, filed a writ petition challenging an assessment order dated March 31, 2020, passed by the Deputy Commissioner (ST). The order, pertaining to the assessment year 2015-16 under the Central Sales Tax Act, 1956 (CST Act), was received by the petitioner on May 1, 2020, via email and a signed copy on May 21, 2020, by post. The petitioner had submitted details of its turnover, including exports and exempted sales, in March 2019. A show cause notice was issued in June 2019. The petitioner contends that the assessment order was passed hastily on the last day of the limitation period, denying them a proper opportunity to present their case, especially due to technical glitches and the COVID-19 lockdown.

Key Issues

1. Whether the assessment order dated March 31, 2020, passed by the Deputy Commissioner (ST) for the assessment year 2015-16 under the CST Act, is illegal, arbitrary, and in violation of the principles of natural justice, specifically concerning the denial of a proper opportunity for personal hearing due to technical glitches and the COVID-19 lockdown. (Question of law and mixed fact and law, turning on principles of natural justice and procedural fairness). Contentions of the Petitioner: - The assessment order was passed on the last day of the limitation period (March 31, 2020), despite the petitioner having submitted relevant documents in March 2019 and receiving the show cause notice in June 2019, thus not allowing sufficient time for submissions. - The petitioner faced technical glitches preventing online responses and was unable to attend the personal hearing fixed on March 16, 2020, due to the nationwide lockdown announced by the Telangana and Indian governments. - Errors were committed in the assessment order, including incorrect calculation of inter-State turnover and imposition of tax at a higher rate. - The existence of an alternative remedy of appeal does not preclude the High Court from exercising its extraordinary jurisdiction under Article 226 of the Constitution. Contentions of the Respondents: - The petitioner was given a reasonable opportunity by the assessing authority. - The petitioner has an alternative remedy of appeal under the CGST Act, which they ought to avail.