Tvl. Kasthyar Industries vs. The State Tax Officer (Fac)

Held

The Court noted that the petitioner has an available statutory remedy of appeal under Section 107 of the Tamil Nadu Goods and Service Tax Act, 2017. Additionally, the Court took into consideration the recommendation of the GST Council, dated 07.10.2023, to provide an amnesty scheme through a special procedure under Section 148 of the Act. This scheme permits taxable persons who could not file an appeal under Section 107 against demand orders under Sections 73 or 74, passed on or before March 31, 2023, to file their appeals up to January 31, 2024, subject to certain conditions. Given the existence of this extended appeal window, the Court found it appropriate to dispose of the writ petition by granting the petitioner liberty to file an appeal before the Appellate Authority. The petitioner was directed to file the appeal within a period of two weeks from the date of receiving a copy of the order. The Court made no order as to costs.

Facts

The petitioner, Tvl. Kasthyar Industries, represented by its Proprietorship S. Jeyakumar, filed a writ petition challenging an assessment order dated 04.01.2023, passed by the respondent, the State Tax Officer (FAC), Tiruchendur. The petitioner contended that the respondent wrongly treated the entire transactions of its suppliers as bogus and did not calculate the Input Tax Credit (ITC) correctly, despite the petitioner possessing invoices. The petitioner also argued that notices were only issued through the web portal, which they were not familiar with, thus preventing them from effectively contesting the proceedings. The respondent pointed out that the petitioner had an alternative remedy of appeal under Section 107 of the Tamil Nadu Goods and Service Tax Act, 2017.

Key Issues

1. Whether the assessment order dated 04.01.2023, passed by the respondent under Section 74 of the Tamil Nadu Goods and Service Tax Act, 2017, is liable to be quashed due to procedural irregularities and incorrect calculation of Input Tax Credit. Petitioner's Arguments: The petitioner argued that the respondent erred by not calculating the Input Tax Credit (ITC) of the petitioner's suppliers and by treating the suppliers' transactions as entirely bogus, despite the petitioner possessing valid invoices. Furthermore, the petitioner claimed that notices were served only through the web portal, a system they were unfamiliar with, which prejudiced their ability to effectively contest the proceedings before the respondent authority. Respondent's Arguments: The respondent contended that the petitioner has an efficacious alternative remedy of appeal under Section 107 of the Tamil Nadu Goods and Service Tax Act, 2017. The respondent also brought to the court's attention the GST Council's recommendation for an amnesty scheme, allowing appeals against demand orders under Sections 73 or 74 passed on or before March 31, 2023, to be filed until January 31, 2024, under a special procedure via Section 148.