Tvl. Sri Vallimurugan Agency vs. The State Tax Officer (Fac)
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The petitioner, Tvl.Sri Vallimurugan Agency, represented by its Proprietor A.Murugan, filed a writ petition challenging an order dated 20.12.2023 passed by the respondent, The State Tax Officer (FAC), Sengottai Assessment Circle. This order pertains to the assessment year 2017-18. The petitioner claims to be a small-time operator unaware of the notices (ASMT-10, GST DRC 01A, and GST DRC 01) and personal hearing notices that preceded the impugned order, and consequently, unaware of the order itself. The disputed tax amount is Rs. 55,528/- (Rs. 27,764/- each for CGST and SGST). The petitioner has since paid the disputed tax amount on 10.04.2024 and seeks an opportunity to explain their case.
Held
The Court, in its discretion, decided to favour the petitioner. It quashed the impugned order dated 20.12.2023 and remitted the case back to the respondent for a fresh assessment. The reasoning was that while the respondent had issued notices and personal hearing notices, the petitioner claimed unawareness, leading to a potential violation of natural justice. The Court directed the petitioner to deposit 10% of the disputed tax amount within 30 days if not already paid, with interest payable from the due date. The impugned order was to be treated as an addendum to the show cause notice, and the petitioner was granted 30 days to file a consolidated reply. The respondent was directed to pass a fresh order on merits and in accordance with law within three months thereafter, ensuring the petitioner is heard before final orders are passed. The Court expressly did not decide on the merits of the tax dispute itself, focusing solely on the procedural fairness.
Key Issues
1. Whether the impugned order dated 20.12.2023, passed by the respondent for the assessment year 2017-18, is liable to be quashed for violating the principles of natural justice, specifically the petitioner's right to be heard. Petitioner's arguments: The petitioner contends that they are a small-time operator and were unaware of the notices and personal hearing opportunities issued by the respondent. Consequently, they were unable to present their case, leading to a violation of natural justice. They seek an opportunity to explain their case and request the impugned order be set aside and the assessment be re-done. Respondent's arguments: The respondent argues that the writ petition is devoid of merits and should be dismissed, citing the Supreme Court's decision in Assistant Commissioner (CT) LTU, Kakinada and others Vs. Glaxo Smith Kline Consumer Health Care Limited. Furthermore, the respondent submits that the appellate remedy is barred, referencing the Supreme Court's decision in Singh Enterprises Vs. Commissioner of C.Ex., Jamshedpur.
Sections Cited
Section 73, Section 129
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Before: and
The petitioner is before this Court against the impugned order dated 20.12.2023 passed by the respondent for the assessment year 2017-18. 2.The impugned order has preceded the notices in ASMT-10, GST DRC 01A and GST DRC 01. The petitioner was also issued with personal hearing notices. However, the petitioner failed to respond to the same and thus, the impugned order has been passed on 20.12.2023. 3.The learned counsel for the petitioner would submit that the petitioner is a small time operator and was unaware of the notices that preceded the impugned order. It is submitted that for the same reason, the petitioner was also unaware of the impugned order that came to be passed on 20.12.2023. Hence, he prays for setting aside the impugned order. 2/6 https://www.mhc.tn.gov.in/judis
It is further submitted that the disputed tax of Rs.55,528/- (Rs.27,764/- x 2 towards CGST and SGST), has been paid by the petitioner on 10.04.2024. He submits that the petitioner may be given one opportunity to explain the case. 5.On the other hand, the learned Government Advocate for the respondent would submit that the writ petition is devoid of merits and is liable to be dismissed, in view of the decision of the Hon'ble Supreme Court in Assistant of the decision of the Hon'ble Supreme Court in Singh Enterprises Vs. Commissioner of C.Ex., Jamshedpur reported in 2008 (221) E.L.T. 163 (S.C). Hence, he prays for dismissal of this writ petition. 7.Having considered the submissions made by the learned counsel for the petitioner and the learned Government Advocate for the respondent, this Court is inclined to exercise its discretion in favour of the petitioner by quashing the 3/6 https://www.mhc.tn.gov.in/judis impugned order and by remitting the case back to the respondent to pass a fresh order on merits and in accordance with law. 8.The petitioner shall deposit 10% of the disputed tax amount to the credit of the respondent, if the same has not been paid earlier, within a period of 30 days from the date of receipt of a copy of this order. However, it is made clear that the interest, if any to be paid by the petitioner, will have to be paid from the date of due date. 9.The impugned order, which stands quashed, shall be treated as addendum to the show cause notice dated 19.09.2023 issued in DRC -01A to the petitioner. The petitioner shall file a consolidated reply with a period of 30 days from the date of receipt of a copy of this order. 10.Subject to the above compliance, the respondent shall pass a fresh order on merits and in accordance with law within a period of 3 months thereafter. It is needless to state that the petitioner shall be heard before final orders are passed in the de novo proceedings. 4/6 https://www.mhc.tn.gov.in/judis
The Writ Petition stands allowed, accordingly. No costs. Consequently, connected Miscellaneous Petitions are closed. Index : Yes / No 27.06.2024 Internet : Yes / No mm To The State Tax Officer (FAC), Sengottai Assessment Circle, Tenkasi District. 5/6 https://www.mhc.tn.gov.in/judis C.SARAVANAN, J.
mm
2024 6/6 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.