M.S. Imam Ali, S/O A. Syed - vs. The Commissioner Of Commer-

Held

The Court held that the impugned proceedings were violative of the principles of natural justice. It is a well-settled legal position that when an authority collects additional details and makes new proposals, it is incumbent upon them to withdraw the previous revision notice and issue a fresh one, incorporating all details and calling for objections. Issuing notice for one proposal and deciding on several others in the final order deprives the assessee of their right to defend themselves against the additional proposals. In this case, the assessing authority considered around twelve transactions without putting the petitioner on notice or furnishing the details obtained from the web portal. Consequently, the Court set aside the impugned proceedings and remitted the matter back to the respondent. The respondent is directed to issue a new proposal, incorporating all transactions along with dealer-wise and invoice-wise details procured from the web portal, call for objections from the petitioner, and decide the matter after affording an opportunity of personal hearing within two months of receiving the objections.

Facts

The petitioner, M.S.Imam Ali, Proprietor of M/s.Ruby Steels, filed a writ petition challenging an order dated 07.11.2014 passed by the Assistant Commissioner (CT) - III, Dindigul. The impugned order reversed Input Tax Credit (ITC) to the tune of Rs.4,07,157/- for the tax period 2011-2012. Initially, a notice was issued proposing to reverse ITC of Rs.1,11,854/-. However, in the final order, the respondent relied on a web report and reversed a significantly higher amount, considering approximately twelve transactions without furnishing the details obtained from the web portal to the petitioner.

Key Issues

1. Whether the impugned order passed by the second respondent, reversing Input Tax Credit to the tune of Rs.4,07,157/- based on a web report, without issuing a fresh notice incorporating all the details and proposals, is violative of the principles of natural justice, specifically the right to be heard and to defend oneself, as contemplated under the relevant provisions of the GST/VAT law? Petitioner's arguments: The petitioner contended that the assessing authority considered approximately twelve transactions and relied on web portal data without putting the petitioner on notice or furnishing these details. This deprived the petitioner of an adequate opportunity to present a defence against the additional proposals, thus violating principles of natural justice. Respondents' arguments: The judgment does not record any specific arguments made by the respondents. However, the order implies that the respondents relied on a web report to arrive at the final reversal amount.