Sri Ramana Agencies vs. The State Tax Officer
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The petitioner, Sri Ramana Agencies, filed a writ petition challenging an order dated 29.09.2023 passed by the State Tax Officer, Pattukottai II Assessment Circle. This order confirmed a demand of Rs. 2,99,842/- (Rs. 1,49,921/- CGST and Rs. 1,49,921/- SGST) for the tax period 2017-18. The order also imposed penalty under Section 73(9) of the TNGST Act, 2017, and interest at 18% under Section 50(1) of the TNGST Act, 2017. The respondent authority passed the impugned order as the petitioner failed to file objections and appear for personal hearings, despite notices being issued and hosted on the portal. The petitioner claimed to be unaware of these notices and the impugned order. Subsequently, the petitioner paid the disputed tax amount on 30.12.2023.
Held
The Court decided to set aside the impugned order dated 29.09.2023. The reasoning was based on the fact that the petitioner had paid the disputed tax amount on 30.12.2023, after the impugned order was passed. Considering this payment and the petitioner's submission that they were unaware of the notices and the order, the Court found it appropriate to grant relief. The Court's decision was to remit the case back to the respondent for passing a fresh order on merits and in accordance with law. The petitioner was directed to file their reply/objections within 30 days of receiving a copy of the order. The impugned order was to be treated as a corrigendum to the show cause notice. The Court expressly did not decide on the merits of the tax demand itself, but rather on the procedural aspect and the subsequent payment of tax.
Key Issues
1. Whether the impugned order dated 29.09.2023, confirming the differential tax liability, penalty, and interest, is liable to be quashed on grounds of procedural illegality and violation of principles of natural justice, particularly concerning the petitioner's alleged non-receipt of notices and non-appearance for hearings? (Question of law and fact, turning on principles of natural justice and procedural fairness under GST law). Petitioner's Contention: The petitioner argued that they were unaware of the notices hosted on the portal and the impugned order, leading to a violation of natural justice. They sought to set aside the order due to this lack of awareness and opportunity to respond. Respondent's Contention: The respondent, through the Additional Government Pleader, noted that notices were issued, and personal hearings were provided, but the petitioner failed to respond or appear. The respondent relied on the fact that the impugned order was passed after the petitioner's non-compliance with the notices.
Sections Cited
Section 73(9), Section 50(1), Section 73(1)
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Before: and
Mr.R.Suresh Kumar, learned Additional Government Pleader takes notice for the respondent. 2.The petitioner is aggrieved by the impugned order dated 29.09.2023 in his proceedings bearing Ref.No.GSTIN:33AHUPC1300N1ZI/2017-18. 3.By the impugned order, the demand proposed in the notices that preceded the impugned order has been confirmed. Apart from the demand that was confirmed, the petitioner has also been imposed with penalty under Section 73(9) of TNGST Act, 2017 and interest at 18% under Section 50(1) of TNGST Act, 2017. 2/6 https://www.mhc.tn.gov.in/judis
The impugned order has been passed, as the petitioner failed to reply as also appear for personal hearing, as it evident from reading of the impugned order, relevant portion of which is extracted below:- “Note: Interest should be calculated upto the date of actual payment of the above differential tax due. Accordingly, ASMT 10 notice, DRC-01 A intimation notice and show cause notice in DRC 01 have been issued in the references cited. On receipt of the notices, the dealer did not file any objections so far. Personal hearing also provided to the dealer in the stage of ASMT 10 notice on 18-5-2023 @ 3PM and 29-8-2023 @2.00 PM and 22-9-2023 @4.00 pm, but the dealer not appeared and not filed any objections as on date. It is presumed that there is none to offer regarding the defect pointed out in the notice.
Therefore I confirm the above proposal and determine the differential tax due to be payable for the assessment year 2017-18 u/s.73(1) of the TNGST Act 2017, is detailed below. Differential tax liability determined under CGST: Rs.1,49,921-00 Differential tax liability determined under SGST: Rs. 1,49,921-00 Total differential tax liability determined :Rs.2,99,842-00” 5.Ex post facto on 30.12.2023, the petitioner has paid the disputed tax, as has been confirmed vide the impugned order. The petitioner seeks indulgence to explain that no case was made out in the impugned order and therefore prays for setting aside the impugned order, as the petitioner failed to notice that the notices 3/6 https://www.mhc.tn.gov.in/judis that preceded the impugned order were hosted in the portal and that the petitioner was unaware of the impugned order dated 29.09.2023. 6.Having considered the submission made by the learned counsel for the petitioner and the learned Additional Government Pleader for the respondent and considering the fact that the petitioner has paid the disputed tax on 30.12.2023, this Court is inclined to set aside the impugned order and remit the case back to the respondent to pass a fresh order on merits and in accordance with law within a period of 60 days from the date of receipt of a copy of this order. The petitioner shall file reply/objection within a period of 30 days from the date of receipt of a copy of this order. The impugned order, which stands quashed, shall be treated as corrigendum to the show cause notice issued to the petitioner. 7.The Writ Petition stands allowed, accordingly. No costs. Consequently, connected Miscellaneous Petitions are closed. Index : Yes / No 23.04.2024 Internet : Yes / No mm 4/6 https://www.mhc.tn.gov.in/judis To The State Tax Officer, Pattukottai II Assessment Circle, CT Buildings, Pattukottai, Thanjavur District. 5/6 https://www.mhc.tn.gov.in/judis C.SARAVANAN, J.
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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.