Tvl. Mani Nadar Sekar vs. The Assistant Commissioner (St)
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The petitioner, Tvl.Mani Nadar Sekar, filed a writ petition challenging an assessment order dated 28.06.2023 passed by the Assistant Commissioner (ST), Tuticorin-III Assessment Circle, for the assessment year 2017-18. The petitioner claimed to be unaware of the notices issued (DRC 01A, DRC 01, and personal hearing notices) as they were posted on the GST common portal, and similarly, unaware of the final order until recovery proceedings were initiated. The petitioner attributed the discrepancies in turnover and tax liability to mismatches between GSTR 1 and GSTR 3B filings, particularly during the initial GST implementation period. The petitioner sought an opportunity to explain these discrepancies.
Held
The Court, while acknowledging the respondent's arguments regarding the time-barred nature of the petition and the availability of appellate remedies, found that the petitioner might have a case on merits. The Court exercised its discretion in favour of the petitioner, setting aside the impugned assessment order. The case was remitted back to the respondent for fresh assessment proceedings. This decision was made conditional upon the petitioner depositing 25% of the disputed tax liability into the respondent's Electronic Cash Register within 30 days of receiving the order. The impugned order was to be treated as an addendum to the show cause notice. The petitioner was directed to file a reply within 30 days of receiving the order, along with the deposit. The respondent was then to pass a fresh order expeditiously, preferably within two months, after hearing the petitioner. The Court did not expressly leave any issue undecided.
Key Issues
1. Whether the assessment order dated 28.06.2023 passed under Section 73(9) of the TNGST Act, 2017, is liable to be quashed due to the petitioner's alleged lack of awareness of the notices and the final order, thereby violating principles of natural justice? 2. Whether the petitioner should be granted an opportunity to explain the discrepancies between GSTR 1 and GSTR 3B filings for the assessment year 2017-18? Petitioner's arguments: The petitioner contended that they were unaware of the notices and the final assessment order because they were only posted on the GST common portal and not received physically. They claimed the discrepancies arose from initial GST implementation issues and requested one opportunity to explain their case. Respondent's arguments: The respondent argued that the writ petition was hopelessly time-barred and liable for dismissal due to laches, citing the Supreme Court's decision in Assistant Commissioner (CT) LTU, Kakinada and others vs. Glaxo Smith Kline Consumer Health Care Limited. The respondent also argued that the appellate remedy was time-barred under Section 107 of the GST Enactments, referencing Singh Enterprises Vs. Commissioner of Central Excise, Jamshedpur and others.
Sections Cited
Section 73(9), Section 107
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Before: and
Heard learned counsel for the petitioner and learned Additional Government Pleader for the respondent.
The petitioner is before this Court against the impugned order dated 28.06.2023 passed under Section 73(9) of the TNGST Act, 2017 for the assessment year 2017-18 bearing reference in GSTIN: 33GBCPS6115P1Z7/2017-18. 3. The impugned order has preceded the notices in DRC 01A dated 20.04.2023, DRC 01 dated 26.05.2023 and personal hearing notices dated 24.04.2023, 31.05.2023, 07.06.2023 and 14.06.2023. However, the petitioner failed to reply the same stating that the petitioner was unaware of the same as the notices were posted on the GST common portal.
It is submitted that the petitioner was also unaware of the passing of the impugned order, as the same was posted in the GST common portal and not received by the petitioner physically. 2/7 https://www.mhc.tn.gov.in/judis
It is submitted that the petitioner came to know about the impugned order only after the Department has initiated the recovery proceedings.
The learned counsel for the petitioner submits that the petitioner is not liable to pay the tax amount as detailed below: Discrepancies Noticed Tax Turnover difference CGST SGST CESS 245081.77 245081.77 1462180.00
It is submitted that the discrepancy is purely on account of the mismatch between the information in GSTR 1 and GSTR 3B. It is further submitted that the tax liability is arisen during the initial years of after the implementation of the GST with effect from 01.07.2017. 8. It is submitted that the petitioner will not in a position to explain the discrepancy and one opportunity may be given to the petitioner to explain the case. 3/7 https://www.mhc.tn.gov.in/judis
On the other hand, the learned Additional Government Pleader for the respondent would submit that this Writ Petition is hopelessly time barred and therefore, liable to be dismissed, on account of latches, in the light of the decision of the Hon'ble Supreme Court in the case of Assistant Commissioner (CT) LTU, Hon'ble Supreme Court in the case of Singh Enterprises Vs. Commissioner of Central Excise, Jamshedpur and others reported in (2008) 3 SCC 70 and submitted that this Writ Petition is liable to be dismissed.
Having considered the arguments advanced by the learned counsel for the petitioner and the learned Additional Government Pleader for the respondent, the Court is of the view that the petitioner may have a case on merits and therefore, the discretion is exercised partly in favour of the petitioner by setting aside the impugned order and remitting the case back to the respondent to pass 4/7 https://www.mhc.tn.gov.in/judis fresh orders on merits and in accordance with law, subject to the petitioner depositing 25% of disputed tax to the credit of the respondent from its Electronic Cash Register within a period of 30 days from the date of receipt of this order.
The impugned order, which stands quashed, shall be treated as addendum to the show cause notice that preceded the impugned order.
It is expected that the petitioner shall file a reply within a period of 30 days from the date of receipt of a copy of this order together with the above deposit. The respondent shall, thereafter, pass a fresh order on merits and in accordance with law as expeditiously as possible preferably within a period of two months. Needless to state, the petitioner shall be heard before the final orders are passed. This Writ Petition is disposed of, with above direction. No costs. Consequently connected miscellaneous petitions are closed. Index : Yes / No 15.07.2024 Internet : Yes / No apd 5/7 https://www.mhc.tn.gov.in/judis To The Assistant Commissioner (ST), Tuticorin-III Assessment Circle, Tuticorin. 6/7 https://www.mhc.tn.gov.in/judis C.SARAVANAN, J.
apd
2024 7/7 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.