M/S. Golden Mesh Industries vs. Assistant Commissioner (State Tax)

Held

The Court allowed the Writ Petition. The primary ground for challenge was the violation of natural justice, as the assessment orders were passed without granting the petitioner a sufficient opportunity to explain their case. The petitioner received the assessment orders on January 7, 2020, and a show cause notice was issued and served on January 9, 2020, indicating that the assessment was finalized before the petitioner could respond. The Court relied on a previous Division Bench order in W.P.No.7789 of 2021, which dealt with a similar situation for the same assessee. Following that precedent, the Court set aside the impugned assessment order dated December 27, 2019, and remitted the matter back to the Assessing Officer for fresh consideration. The Court directed that the assessment order itself be treated as a show cause notice, and the petitioner was to file their reply by November 6, 2023. The Assessing Officer was to proceed and decide the matter within 45 days from the receipt of the petitioner's reply. Consequently, all consequential attachment and distraint orders were also set aside.

Facts

The petitioner, M/s. Golden Mesh Industries, challenged assessment orders dated December 27, 2019, for the tax periods December 2018 to October 2019. The petitioner contended that these orders, along with subsequent attachment and distraint orders, were passed in violation of natural justice. Specifically, the assessment orders were received on January 7, 2020, and a show cause notice was issued on the same date, served on the petitioner on January 9, 2020. This timeline allegedly prevented the petitioner from providing a proper explanation before the assessment orders were finalized. The petitioner sought to set aside the assessment orders, attachment notice, distraint order, and demand notice, and also sought a stay on the disputed tax, interest, late fee, and penalty totaling Rs. 1,04,44,500.

Key Issues

1. Whether the assessment orders dated December 27, 2019, passed by the Assistant Commissioner (State Tax) for the tax periods December 2018 to October 2019, were in violation of the principles of natural justice, specifically the right to a fair hearing, as stipulated under the Central Goods and Services Tax Act, 2017, and the Telangana Goods and Services Tax Act, 2017? Petitioner's Contention: The petitioner argued that the assessment orders were passed without affording them a proper opportunity to be heard. They received the assessment orders on January 7, 2020, and a show cause notice was issued on the same day, which was served on January 9, 2020. This timing meant the assessment orders were finalized before the petitioner could adequately respond to the show cause notice. Revenue's Contention: The judgment does not record any specific arguments made by the revenue or state respondents.