Tvl V M And Co vs. The State Tax Officer

Held

The Court held that the impugned assessment order dated 12.07.2024 suffered from the vice of being a non-speaking order, thus violating the principles of natural justice. The Court found that the Assessing Officer had not dealt with the objections of the petitioner at all, merely stating that the reply was not convincing and not supported by valid documentary evidence, without any specific reasoning. The Court agreed with the petitioner that reasoning is essential for any conclusion in a quasi-judicial order. Consequently, the impugned order was set aside. The respondent was directed to proceed with the matter in accordance with law, treating the assessment order as a show cause notice. The petitioner was granted two weeks from the date of receipt of the order to submit their objections, after which the respondent was to pass appropriate orders after affording a hearing. The petitioner was also permitted to raise all available objections before the authority.

Facts

The petitioner, Tvl. V M & Co., a works contractor, challenged an assessment order dated 12.07.2024 passed by the respondent, the State Tax Officer. The petitioner argued that the order was passed in violation of natural justice, without application of mind, and was a non-speaking order. The petitioner had submitted detailed replies to a show cause notice (Form GST-DRC01A dated 02.04.2024) regarding a proposed treatment of Rs. 42.86 crores as suppression. The petitioner contended that out of total receipts of Rs. 48.10 crores for 2017-2018, Rs. 44.96 crores were under the VAT regime, and only Rs. 3.35 crores were under the GST regime, on which taxes were duly paid. The petitioner claimed the Assessing Officer rejected their reply stating it was 'not convincing' and 'not supported with valid documentary evidences' without properly considering the furnished details.

Key Issues

1. Whether the assessment order dated 12.07.2024 passed by the respondent is a non-speaking order, thereby violating the principles of natural justice? (Question of law) 2. Whether the respondent failed to apply its mind to the material on record and the objections submitted by the petitioner? (Question of mixed law and fact) Petitioner's Arguments: The petitioner contended that the impugned assessment order was non-speaking as it merely stated the reply was not convincing and not supported by valid documentary evidence, without dealing with the specific objections raised by the petitioner regarding the allocation of receipts between the VAT and GST regimes. They argued that the Assessing Officer did not consider the detailed replies and documents submitted, leading to a violation of the principles of natural justice. The petitioner relied on the trite law that quasi-judicial orders with adverse consequences must be reasoned and comply with natural justice principles. Respondent's Arguments: The respondent, through its learned counsel, submitted that liberty may be granted to re-do the assessment after affording the petitioner another opportunity.