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 12.09.2024 and a subsequent rectification order dated 25.11.2024, both passed by the respondent, The State Tax Officer (INS) III. These orders pertain to the assessment year 2020-2021. The petitioner contended that the respondent lacked jurisdiction to pass the adjudication order, arguing that proceedings under Sections 73 and 74 of the CGST/TNGST Act, 2017, should have been initiated by the Central GST Department. Furthermore, the petitioner claimed the assessment order was passed without providing sufficient opportunity, violating principles of natural justice. The respondent countered that show cause notices and personal hearing notices were issued, and the petitioner had an alternative appeal remedy under Section 107 of the GST Act, 2017.

Held

The Court noted the submission by the learned Government Advocate that the petitioner has an appeal remedy before the appellate Deputy Commissioner (ST) (GST Appeal), Trichy, under Section 107 of the GST Act, 2017. Consequently, the Court disposed of the writ petition, granting the petitioner liberty to approach the appellate authority. The petitioner was permitted to raise all grounds raised in the writ petition before the appellate authority. The Court directed that if an appeal is filed within two weeks from the date of receipt of the order, the appellate authority shall entertain it without reference to the period of limitation and dispose of the same in accordance with law within three months thereafter. The Court made no order as to costs.

Key Issues

1. Whether the respondent, the State Tax Officer (INS) III, had the jurisdiction to pass the adjudication order under Sections 73 and 74 of the CGST/TNGST Act, 2017, or if such proceedings should have been initiated by the Central GST Department? 2. Whether the assessment order and subsequent rectification order were passed in violation of the principles of natural justice due to insufficient opportunity provided to the petitioner? Petitioner's Arguments: The petitioner argued that the respondent lacked jurisdiction, as only the Central GST Department is competent to initiate proceedings under Sections 73 and 74 of the CGST/TNGST Act, 2017. They also contended that the assessment order was passed without adequate opportunity, violating natural justice principles, and that the demand was based on the petitioner's own records, negating any alleged willful suppression or intent to evade tax. Respondent's Arguments: The respondent argued that the impugned orders were passed after issuing a show cause notice (DRC 01) and personal hearing notices, thus complying with procedural requirements. They further submitted that the petitioner possessed an effective alternative remedy by way of an appeal under Section 107 of the GST Act, 2017, and should have availed it instead of approaching the High Court directly.