M/S. Jayam And Co vs. The Deputy State Tax Officer-1
Original PDF →Facts
M/s. Jayam and Co. (Petitioner) filed a writ petition challenging an assessment order dated 25.02.2025, passed by the Deputy State Tax Officer - I (Respondent) for the year 2020-2021. The Petitioner contended that this was a third demand for the same period and issue, as a Central GST Officer had already issued an assessment order for the period 2017-2018 to 2020-2021, demanding Rs. 71,97,634/-. The Petitioner had appealed this order. The Petitioner also argued that the impugned order was passed ex-parte without adequate notice, communicated only via the GSTN portal, and amounted to triple 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 not fully addressed by the Central GST assessment. They asserted that the show cause notice was issued on the portal, and it was the Petitioner's responsibility to monitor it. The Respondent denied triple taxation, stating the demand related to a different aspect of turnover.
Held
The Court held that the impugned order was passed without proper consideration of the overlapping demand for the same period and that the Petitioner was not provided with adequate notice, as the order was issued ex-parte through the GSTN portal. The Court also noted that the issue of triple taxation raised by the Petitioner required further examination. Consequently, the Court found 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. This reconsideration is to include a detailed examination of the issues raised by the Petitioner, such as the overlap in demand, the method of communication, and the triple 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. No specific finding was given on the merits of the demand itself, only on the procedural irregularities.
Key Issues
1. Whether the impugned order dated 25.02.2025, passed by the Respondent, is a third demand on the same issue and for the same period (2020-2021) for which a Central GST assessment order has already been passed, thereby violating principles of natural justice and potentially leading to triple taxation? (Question of law and mixed fact and law). Petitioner's Arguments: The Petitioner argued that the impugned order constituted a third demand on the same issue and period, following a Central GST assessment order for 2017-2018 to 2020-2021. They contended that this resulted in triple taxation and that the order was passed ex-parte without adequate notice, as it was only communicated through the GSTN portal. Respondent's Arguments: The Respondent argued that the impugned order was a separate and distinct demand under the State GST Act, addressing discrepancies between GSTR-9 and GSTR-3B that were not fully covered by the Central GST assessment. They maintained that the Petitioner had adequate notice via the GSTN portal and that there was no overlap or triple taxation, as the demand related to a different aspect of turnover. They relied on the statutory procedure for issuing notices through the GSTN portal.
Sections Cited
Article 226 of the Constitution of India
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Before: and
This writ petition is filed challenging the assessment order passed by the respondent, dated 25.02.2025, for the year 2020-2021. 2. The learned counsel for the petitioner submits that the impugned order was passed as a third 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 and State Tax Officers. 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
2025, 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 triple taxation and therefore, the impugned order 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 third 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 25.11.2024, 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 triple taxation, as the GST demanded relates to a different aspect of the petitioner's taxable turnover that was not fully captured in the earlier assessments. 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 triple 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 triple 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 triple 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 (2/2)
smn2 To:- The Deputy State Tax Officer -I, Gandhi Market Assessment Circle, Multistoried Buildings, Khajamalai, Mannarpuram, Tiruchirapalli – 620020. ____________ https://www.mhc.tn.gov.in/judis VIVEK KUMAR SINGH
, J.
smn2
2025 (2/2) ____________ 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.