Tvl.Chendur Enterprises vs. The State Tax Officer (Inspection)

Held

The Court held that the principles of natural justice were violated by the respondent while passing the impugned assessment orders. It was noted that the petitioner had repeatedly requested copies of seized documents, which were only furnished on 29.10.2020, and the assessment orders were passed on 31.10.2020, leaving a very short period for the petitioner to prepare their objections. The Court found that no personal hearing was afforded after the documents were provided. However, considering the significant tax liability, the Court directed the petitioner to pay a sum of Rs. 2,00,000/- for each assessment year on or before 05.01.2021. Upon compliance, the impugned orders would be quashed, and the matter would be remanded to the respondent for fresh consideration on merits, after affording sufficient opportunity to the petitioner to raise all objections and providing a personal hearing within twelve weeks. The Court also stipulated that non-compliance would lead to the automatic dismissal of the writ petitions.

Facts

The petitioner, Tvl. Chendur Enterprises, filed three writ petitions challenging assessment orders dated 31.10.2020, passed by the State Tax Officer (Inspection), Tirunelveli, for the tax periods 2017-2018, 2018-2019, and 2019-2020. The petitioner contended that the respondent violated principles of natural justice by issuing a show cause notice in August 2020 and passing assessment orders within two months, on 31.10.2020. The petitioner claimed that copies of seized documents, crucial for their objections, were only provided on 29.10.2020, leaving insufficient time to prepare and no opportunity for a personal hearing. The respondent argued that sufficient opportunity and personal hearing were granted, and the petitioner's remedy lay in statutory appeal.

Key Issues

1. Whether the respondent violated the principles of natural justice by passing assessment orders dated 31.10.2020, within two days of furnishing seized documents on 29.10.2020, without affording sufficient opportunity to the petitioner to raise objections and without providing a personal hearing, thereby contravening the principles of natural justice as enshrined in the Goods and Services Tax Act? Petitioner's arguments: The petitioner argued that the short timeframe between receiving seized documents and the passing of assessment orders, coupled with the absence of a personal hearing, constituted a violation of natural justice. They contended that the documents submitted for claiming input tax credit were genuine and they were not liable for the demanded tax. Respondent's arguments: The respondent contended that sufficient opportunity, including a personal hearing, was granted to the petitioner before passing the assessment orders, and therefore, principles of natural justice were not violated. The respondent further argued that the petitioner's sole remedy was to file a statutory appeal under the Goods and Services Tax Act.