M/S. Jayam And Co vs. The State Tax Officer (Ins)-Ii
Original PDF →Facts
The petitioner, M/s. Jayam and Co., filed a writ petition challenging an order dated 15.12.2023 passed by the State Tax Officer (INS)-II, for the tax period 2020-2021. The petitioner contended that this order was a second demand on the same issue and period for which a Central GST officer had already issued an assessment order. The Central GST assessment had confirmed a differential GST demand of Rs. 71,97,634/- for the period 2017-2018 to 2020-2021, against which the petitioner had filed an appeal. The petitioner further argued that the impugned order was passed ex-parte without adequate notice, as it was communicated only through the web portal, and that the demand constituted double taxation. The respondent argued that the impugned order was a separate demand under the State GST Act, based on discrepancies between GSTR-9 and GSTR-3B filings not fully addressed by the Central GST officers, and that the show cause notice was issued through the GSTN portal on 14.07.2023.
Held
The Court held that the impugned order was passed without proper consideration of the overlapping demand for the same period and without providing the petitioner with adequate notice, as it was issued ex-parte through the GSTN portal. The Court also found that the issue of double taxation raised by the petitioner required further examination. Consequently, the Court concluded that the principles of natural justice were not fully adhered to. The impugned order was set aside, and the matter was remitted back to the respondent for fresh consideration. The respondent was directed to conduct a detailed examination of the issues raised by the petitioner, including the overlap in demand, the method of communication, and the double taxation issue. The petitioner was to be provided with an opportunity to be heard, and the respondent was to pass appropriate orders on merits and in accordance with law within four months. The Court expressly left the detailed examination of the merits of the demand and the double taxation issue to the respondent.
Key Issues
1. Whether the impugned order dated 15.12.2023, passed by the respondent for the period 2020-2021, constitutes a second demand on the same issue and period for which a Central GST assessment order was already issued, leading to potential double taxation? (Question of law) 2. Whether the impugned order was passed in violation of the principles of natural justice, specifically regarding adequate notice and opportunity to be heard, given its communication solely through the GSTN portal? (Question of mixed law and fact) Petitioner's Arguments: The petitioner argued that the impugned order was a second demand for the same period and issue already covered by a Central GST assessment, leading to double taxation. They also contended that the order was passed ex-parte without proper notice, as it was only communicated via the web portal, denying them an opportunity to respond. Respondent's Arguments: The respondent argued that the impugned order was a distinct demand under the State GST Act, addressing discrepancies between GSTR-9 and GSTR-3B filings that were not fully covered by the Central GST assessment. They asserted that the show cause notice was issued through the GSTN portal on 14.07.2023, and it was the petitioner's responsibility to monitor the portal. The respondent denied double taxation, stating there was no overlap in the demands raised by Central and State GST authorities.
Sections Cited
Section 73, Section 129
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Before: and
This writ petition is filed challenging the assessment order passed by the respondent, dated 15.12.2023, for the year 2020-2021. 2. The learned counsel for the petitioner submits that the impugned order was passed as a second demand on the same issue and for the same period 2020-2021, for which an order had already been issued by the Central GST officer. The learned counsel for the petitioner further submits that the Central GST officers in Trichy had already conducted a detailed investigation regarding the taxable value reported in GSTR-3B for both the cancelled registration (2017-2018) and the new registration (2018-2019 to 2020-2021), resulting in an assessment order, confirming a differential GST demand of Rs.71,97,634/- for the period 2017-2018 to 2020-2021. Aggrieved by the said order, the petitioner has filed an appeal before the Joint Commissioner of CGST & C.Excise (Appeals), Trichy on 22.01.2024. 3. The learned counsel for the petitioner further submits that, during recovery proceedings, the petitioner was made aware of the impugned order dated ____________ https://www.mhc.tn.gov.in/judis
2023, confirming the demand and imposing penalties, which the petitioner had no chance to respond to, as the order was also only communicated through the web portal. The learned counsel also submits that the collection of tax amounts to double taxation and therefore, the order impugned in this writ petition, is liable to be set aside.
The learned Government Advocate appearing for the respondent submits that the impugned order was not a second demand on the same issue or for the same period, but a separate and distinct demand issued under the State GST Act. The demand raised in the impugned order is based on discrepancies found between the GSTR-9 and GSTR-3B filings, which was not fully addressed in the earlier assessment order issued by the Central GST officers. The learned Government Advocate submits that it is within their juri iction to issue a demand for GST under the State GST Act, irrespective of the Central GST assessment, as both taxes are separate and governed by different legislation.
The learned Government Advocate appearing for the respondent further submits that the show cause notice for the impugned demand was issued through ____________ https://www.mhc.tn.gov.in/judis the GSTN portal on 14.07.2023, in accordance with the statutory procedure. It is the responsibility of the petitioner to regularly monitor the GST portal and respond to any notices issued. The learned Government Advocate submits that the petitioner had the opportunity to view and respond to the notices but failed to do so and therefore, cannot now claim a lack of notice or opportunity to be heard.
The learned Government Advocate appearing for the respondent also submits that the tax demanded in the impugned order, is not a case of double taxation, as the GST demanded relates to a different aspect of the petitioner's taxable turnover that was not fully captured in the earlier assessment. The respondent clarifies that there is no overlap in the demand raised by the Central GST authorities and the State GST authorities and as such, there is no question of double taxation. The learned Government Advocate submits that the impugned order was issued in accordance with the applicable laws and the penalties imposed were in line with the statutory provisions for non-compliance. The learned Government Advocate contends that the petitioner had adequate opportunity to be heard, but they failed to utilize the available remedies. Therefore, the learned Government Advocate prays that the writ petition be dismissed and the impugned order be upheld. ____________ https://www.mhc.tn.gov.in/judis
Heard both sides.
Upon considering the submissions of both parties, this Court finds that the impugned order was passed without proper consideration of the overlapping demand for the same period, as well as the failure to provide the petitioner with adequate notice of the order, which was issued ex-parte through the GSTN portal. Furthermore, the issue of double taxation raised by the petitioner requires further examination.
In view of the above, this Court concludes that the principles of natural justice were not fully adhered to and as such, the impugned order is set aside. The matter is remitted back to the respondent for a fresh consideration, including a detailed examination of the issues raised by the petitioner, such as the overlap in demand, the method of communication and the double taxation issue. The respondent is directed to provide the petitioner with an opportunity to be heard and to pass appropriate orders on merits and in accordance with law, within four months from the date of receipt of this order. ____________ https://www.mhc.tn.gov.in/judis
Accordingly, this Writ Petition is allowed. There shall be no order as to costs. Consequently, connected Miscellaneous Petition is closed. NCC : Yes / No
2025 Index : Yes / No (1/2)
smn2 To:- The State Tax Officer (INS)-II, O/o. Deputy Commissioner (ST) (INS), Commercial Tax Building, Tiruchirapalli – 620020. ____________ https://www.mhc.tn.gov.in/judis VIVEK KUMAR SINGH
, J.
smn2
2025 (1/2) ____________ https://www.mhc.tn.gov.in/judis
Reproduced from the public record of the Madras High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.