M/S. R.C Ravichandran Contractor vs. The Assistant Commissioner (St)

Facts

The petitioner, M/s. R.C Ravichandran Contractor, filed a writ petition challenging a summary order passed by the Assistant Commissioner (ST), Pudukkottai, on August 30, 2024. This order, in Form GST DRC-07, pertains to the financial year 2019-20. The petitioner contended that the order was passed in gross violation of principles of natural justice and statutory provisions. The impugned order was preceded by a notice in DRC-01 under Section 73 of the TNGST Act, 2017, also dated August 30, 2024. The petitioner sought to quash the order and requested a de novo reassessment after issuing a fresh show cause notice and granting a reasonable opportunity of hearing, considering amended returns, DRC-03 payments, and corrected turnover figures. They also sought to declare the order void ab initio for want of due process under Section 75(4) of the CGST Act and Rule 142 of the CGST Rules, and to process their application for waiver of interest and penalty.

Held

The Court held that there was a clear violation of the principles of natural justice. The respondent issued the notice in DRC-01 on August 30, 2024, and passed the impugned order on the same date, despite the notice indicating that an opportunity of being heard would be provided. The Court found that this procedural lapse occurred even though the petitioner had the statutory right to file an appeal. The Court reasoned that latches could not be operated against the petitioner in light of this violation. Consequently, the impugned order was set aside. The case was remitted back to the respondent to pass orders afresh on merits and in accordance with law. The petitioner was directed to file a reply within 30 days of receiving a copy of the order, and the respondent was directed to pass orders expeditiously, preferably within three months. The Court did not expressly leave any issue undecided.

Key Issues

1. Whether the impugned summary order dated 30.08.2024, passed by the respondent, is illegal, arbitrary, and in gross violation of the principles of natural justice and statutory provisions, specifically concerning the opportunity of hearing under Section 75(4) of the CGST Act and Rule 142 of the CGST Rules? Petitioner's arguments: The petitioner argued that the respondent passed the assessment order on the same date as the notice (DRC-01) was issued, despite the notice stating that an opportunity of being heard would be extended. This, they contended, constitutes a violation of the principles of natural justice. They also argued that the order was passed without due process, rendering it void ab initio. They sought a fresh show cause notice, a reasonable opportunity of hearing, and consideration of amended returns, DRC-03 payments, and corrected turnover figures. Respondent's arguments: The respondent, represented by the Additional Government Pleader, did not explicitly record arguments in the judgment, but the court noted that the petitioner had an opportunity to file a statutory appeal.