M/S. N N Engineering Works vs. The State Tax Officer (Ins) Iii

Facts

The petitioner, M/s.N.N.Engineering Works, filed a writ petition challenging an assessment order dated 27.08.2024 passed by the respondent, the State Tax Officer (INS) III, for the Assessment Year 2022-2023. The petitioner argued that the respondent lacked jurisdiction to pass the order, contending that proceedings under Sections 73 and 74 of the CGST/TNGST Act, 2017, should be initiated by the Central GST Department. Furthermore, the petitioner claimed the assessment order was passed without sufficient opportunity, violating principles of natural justice, and that the demand was based on their own records, not willful suppression. The respondent countered that the order was passed after issuing a show cause notice and personal hearing notices, and that the petitioner had an alternative appeal remedy under Section 107 of the GST Act, 2017.

Held

The Court noted the respondent's submission that the petitioner has an available appeal remedy before the appellate Deputy Commissioner (ST) (GST Appeal), Trichy, under Section 107 of the GST Act, 2017. Consequently, the writ petition was disposed of by granting liberty to the petitioner to approach the appellate authority. The Court directed that all grounds raised in the writ petition could be raised in the appeal. If an appeal is filed within two weeks from the date of receiving a copy of the order, the appellate authority shall entertain it without reference to the period of limitation and dispose of the appeal in accordance with law within three months thereafter. The Court did not decide on the merits of the petitioner's jurisdictional or natural justice arguments, leaving them to be adjudicated by the appellate authority.

Key Issues

1. Whether the respondent, the State Tax Officer (INS) III, has the jurisdiction to pass an assessment order under Sections 73 and 74 of the CGST/TNGST Act, 2017, or if such proceedings exclusively lie with the Central GST Department? (Question of law) 2. Whether the assessment order dated 27.08.2024 was passed in violation of the principles of natural justice due to insufficient opportunity provided to the petitioner? (Question of mixed law and fact) Petitioner's arguments: The respondent lacks jurisdiction as only the Central GST Department can initiate proceedings under Sections 73 and 74. The assessment order was passed without sufficient opportunity, violating natural justice. The demand is based on the petitioner's records, not willful suppression or intent to evade tax. Respondent's arguments: The impugned order was passed after issuing a show cause notice (DRC-01) and multiple personal hearing notices, indicating sufficient opportunity. The petitioner has an available statutory appeal remedy under Section 107 of the GST Act, 2017, before the appellate Deputy Commissioner (ST), and should have availed that instead of approaching the High Court directly.