Varun Constructions vs. The Deputy State Tax Officer-2

Facts

The petitioner, Varun Constructions, represented by its Managing Partner, R. Murugan, filed a writ petition before the Madurai Bench of the Madras High Court. The petition challenged an assessment order dated 21.08.2024 and a connected order in Form GST DRC-07 dated 21.08.2024, passed by the Deputy State Tax Officer-2, Ponmalai Assessment Circle. These orders pertained to the assessment year 2019-2020. The petitioner contended that the assessment order was passed without providing sufficient opportunity, violating principles of natural justice. The respondent argued that a show cause notice (DRC 01) was issued on 21.05.2023, followed by reminders, and that the petitioner had an alternative appeal remedy under Section 107 of the GST Act, 2017.

Held

The Court noted the submission by the learned Government Advocate that the petitioner possesses an appeal remedy before the Deputy Commissioner (ST) (Appeal), Tiruchirappalli, under Section 107 of the GST Act, 2017. Consequently, the writ petition was disposed of by granting the petitioner liberty to approach the appellate authority. The petitioner was permitted to raise all grounds raised in the writ petition before the appellate authority. The Court directed that if an appeal is filed within two weeks from the date of receipt of the order, the appellate authority shall entertain it without reference to the period of limitation. The appellate authority was further directed to dispose of the appeal in accordance with law within three months thereafter. No order as to costs was made.

Key Issues

1. Whether the assessment order dated 21.08.2024, passed by the respondent for the assessment year 2019-2020, is liable to be quashed for violation of the principles of natural justice due to insufficient opportunity provided to the petitioner? (Question of law and fact, concerning principles of natural justice and procedural fairness). Petitioner's contention: The assessment order was passed without affording sufficient opportunity to the petitioner, thus violating the principles of natural justice, and should be set aside. Respondent's contention: A show cause notice was issued on 21.05.2023, followed by reminders on 01.07.2024 and 12.07.2024, indicating that sufficient opportunity was provided. The petitioner has an alternative statutory remedy of appeal under Section 107 of the GST Act, 2017, and should have availed it instead of approaching the High Court directly.