M/S. Balaji Traders vs. The State Tax Officer

Held

The Court held that the impugned assessment order could not be sustained and was liable to be quashed. The primary reason for this decision was the procedural irregularity concerning the issuance of the show cause notice and the subsequent assessment order. The Court found that the uploading or serving of the summary of show cause notice in Form GST-DRC-01 under Rule 142(1) of the CGST Rules is not a mere formality but a mandatory requirement to provide the assessee with an opportunity to respond. In this case, the respondent uploaded the summary of the show cause notice on 04.06.2020 and, without granting any 'breathing time' for the petitioner to respond, passed the impugned assessment order on the very same day. The Court emphasized that this lack of opportunity to respond rendered the order unsustainable. The Court therefore quashed the impugned order and remitted the matter back to the respondent for reconsideration. The respondent was directed to freshly upload the summary of the show cause notice, if already issued, and provide the petitioner with adequate breathing time to respond electronically. After the petitioner responded, the respondent was to afford an opportunity of being heard before passing a fresh assessment order in accordance with law.

Facts

The petitioner, M/s.Balaji Traders, filed a writ petition challenging an order dated 04.06.2020 issued by the respondent, the State Tax Officer. The petitioner contended that the order was passed without jurisdiction and in violation of Section 140(1) of the Tamil Nadu Goods and Services Tax Act, 2017. The petitioner sought to quash the order and direct the respondent to pass a fresh order after providing a personal hearing as per Section 75(4) of the Act. The respondent intended to revisit the tax issues for the financial year 2017-18, despite monthly returns being filed. A notice was issued on 13.09.2019. The petitioner argued that a summary of the show cause notice in Form GST-DRC-01, as per Rule 142(1) of the CGST Rules, should have been issued and uploaded electronically, allowing the petitioner time to respond before an assessment order was passed.

Key Issues

1. Whether the impugned assessment order dated 04.06.2020 is liable to be quashed for being passed without jurisdiction and in violation of Section 140(1) of the Tamil Nadu Goods and Services Tax Act, 2017? 2. Whether the respondent violated the principles of natural justice by passing the assessment order on the same day the summary of show cause notice in Form GST-DRC-01 was uploaded, without affording the petitioner adequate breathing time to respond, contrary to Rule 142(1) of the CGST Rules and Section 75(4) of the Tamil Nadu Goods and Services Tax Act, 2017? Petitioner's Contentions: The petitioner argued that the order was passed without jurisdiction and in clear violation of Section 140(1) of the Tamil Nadu Goods and Services Tax Act, 2017. Crucially, the petitioner contended that the respondent failed to provide sufficient time to respond to the summary of show cause notice in Form GST-DRC-01, which was uploaded on 04.06.2020, and proceeded to pass the assessment order on the very same day. This, according to the petitioner, violated Rule 142(1) of the CGST Rules and Section 75(4) of the Tamil Nadu Goods and Services Tax Act, 2017, which mandate affording an opportunity of personal hearing. Revenue's Contentions: The judgment does not record any specific contentions made by the respondent revenue.