M/S. Open Eye Security Services vs. State Tax Officer

Facts

The petitioner, M/s. Open Eye Security Services, filed a writ petition before the Madurai Bench of the Madras High Court challenging an assessment order dated 30.01.2020 and a consequential rejection order dated 08.07.2024, both passed by the respondents, the State Tax Officer and others. The petitioner contended that the respondents erroneously raised a double demand in Form GST DRC-07 and initiated attachment proceedings without proper notice or personal hearing, violating principles of natural justice and procedural safeguards. The petitioner also argued that the orders were time-barred and arbitrary. The respondents submitted that the demand was valid and that the petitioner had an alternative appeal remedy under Section 107 of the TNGST Act, 2017.

Held

The Court noted the submission by the learned Government Advocate that the petitioner has an appeal remedy before the Deputy Commissioner (ST), Trichy, under Section 107 of the TNGST Act, 2017. Consequently, the writ petition was disposed of with liberty granted to the petitioner 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 a copy of the order, the appellate authority shall entertain the appeal without reference to the period of limitation and dispose of it in accordance with law within one month thereafter. Pending the appeal, the respondents were directed to maintain the status quo prevailing as on the date of the order. No order as to costs was made. The Court did not decide the merits of the petitioner's contentions regarding the illegality, time-bar, or arbitrariness of the impugned orders.

Key Issues

1. Whether the impugned assessment order dated 30.01.2020 and the consequential rejection order dated 08.07.2024 are illegal due to alleged violation of principles of natural justice and procedural safeguards under Sections 75(4) and 169 of the GST Act. 2. Whether the impugned orders are time-barred under Section 73(10) of the GST Act. 3. Whether the actions of the respondents are arbitrary and infringe upon the petitioner's fundamental rights. Petitioner's Arguments: The petitioner argued that the respondents raised a double demand in Form GST DRC-07 and initiated attachment proceedings without proper notice or personal hearing, thus violating the principles of natural justice as per Section 75(4) of the GST Act and procedural safeguards under Section 169 of the GST Act. They also contended that the orders were time-barred under Section 73(10) of the GST Act and that the respondents' actions were arbitrary, amounting to unjust enrichment and infringing upon fundamental rights under Articles 14 and 19(1)(g) of the Constitution of India. Respondents' Arguments: The respondents argued that the demand raised in Form GST DRC-07 was valid and in accordance with the GST Act. They further submitted that the petitioner had an appeal remedy before the appellate Deputy Commissioner, Trichy, under Section 107 of the TNGST Act, 2017, and had approached the High Court directly without availing this remedy.