M/S.Arun Prabhu And Co. vs. The Assistant Commissioner St

Held

The Court held that the impugned order dated 10.08.2024 was liable to be set aside. A perusal of the order revealed that the respondent failed to apply his mind to the petitioner's reply. The respondent had merely reproduced the show cause notice and the reply, and in a single, cryptic line, concluded that the reply was "not found in order" without providing any reasons. The Court agreed with the petitioner's submission that the impugned order lacked any determination on why the show cause notice should be sustained. This failure to provide reasons and engage with the petitioner's reply was found to be a violation of Section 73 of the GST Act. Consequently, the Court allowed the writ petition, set aside the impugned order, and remitted the matter back to the respondent. The respondent was directed to consider the petitioner's reply, afford one final opportunity of a personal hearing, and thereafter pass orders on merits and in accordance with law.

Facts

M/s. Arun Prabhu & Co. (the petitioner) filed a writ petition challenging an order dated 10.08.2024 passed by the Assistant Commissioner (ST), Sivakasi III Assessment Circle (the respondent). The petitioner had previously filed a reply on 26.06.2024 to a notice dated 29.05.2024. The petitioner contended that the impugned order was cryptic, non-speaking, and failed to determine the tax payable. It merely stated that the reply was not in order and upheld the show cause notice, without any independent consideration or discussion. The petitioner sought to quash the order and requested a fresh order after considering their objections and affording a personal hearing. The tax period in dispute is 2019-2020.

Key Issues

1. Whether the impugned order dated 10.08.2024, passed by the respondent, is a cryptic and non-speaking order, failing to comply with the principles of natural justice and statutory requirements, thereby violating Section 75(4) of the TNGST Act, 2017 and Circular No.8/2024? Petitioner's arguments: The petitioner argued that the impugned order was passed without proper application of mind to their detailed reply dated 26.06.2024. They contended that the order merely extracted the show cause notice and their reply, and in a single line, stated the reply was "not found in order" without providing any reasons or discussion. This, according to the petitioner, demonstrated a lack of determination and violated Section 75(4) of the TNGST Act, 2017, and the guidelines in Circular No.8/2024. They sought a fresh order on merits after a personal hearing. Respondent's arguments: The respondent argued that the show cause notice itself contained the reasons for its issuance, which should be considered as the respondent's determination. They also contended that the petitioner had not exhausted the alternative remedy available.