Tvl Hi Tech Overseas vs. The Commissioner Of Commercial Taxes

Held

The Court held that the impugned order dated 26.03.2024 is set aside. The Court reasoned that the petitioner's claim of not receiving proper service of notice and the subsequent inability to participate in the proceedings due to portal access issues, coupled with the respondent's lack of serious objection to a final opportunity, warranted a reconsideration. The Court acknowledged the petitioner's submission regarding technical glitches in the GST portal and the time taken for assessees to adapt to the e-mechanism. The ratio decidendi is that principles of natural justice must be upheld, and where there is a plausible explanation for non-participation and a willingness to comply with certain conditions, a final opportunity should be granted. The Court directed the petitioner to deposit 25% of the disputed tax within two weeks of receiving the order. Upon compliance, the impugned order would be treated as a show cause notice, and the petitioner would have four weeks to submit objections with supporting documents. The respondent would then consider these objections and pass orders after affording a reasonable opportunity of hearing. The Court explicitly stated that if the deposit or objections are not filed within the stipulated periods, the impugned order would stand revived.

Facts

The petitioner, Tvl.HI TECH OVERSEAS, filed a Writ Petition challenging an order dated 26.03.2024 passed by the Deputy State Tax Officer I, Dindigul Rural Assessment Circle, concerning the tax period 2018-2019. The impugned order was based on the premise that the petitioner had not declared correct tax liability in its annual returns (GSTR-09), had availed Input Tax Credit (ITC) without complying with Section 16(2)(c) of the GST Act (i.e., taxes not paid by the supplier), and had availed ineligible ITC under Section 17(5). The respondent contended that notices were issued and personal hearings offered, but the petitioner neither replied nor attended. The petitioner argued that notices and the order were uploaded to the GSTIN portal and not served by tender or RPAD, and they were unable to access the portal, thus unable to participate in proceedings. They sought an opportunity to present their case.

Key Issues

1. Whether the impugned order dated 26.03.2024, passed by the Deputy State Tax Officer I, is liable to be quashed on the grounds that it was passed without proper service of notice and opportunity of hearing to the petitioner, thereby violating principles of natural justice, as argued by the petitioner? 2. Whether the petitioner's inability to access the GSTIN portal and participate in adjudication proceedings due to technical glitches and adaptation to the e-mechanism constitutes a valid ground for setting aside the impugned order and granting a fresh opportunity, as contended by the petitioner? Petitioner's Arguments: The petitioner argued that the show cause notices and the impugned order were not served through conventional means like tender or RPAD but were merely uploaded to the GSTIN portal. They further contended that they faced difficulties accessing the portal, preventing their participation in the adjudication process. They relied on the judgment in M/s.K.Balakrishnan, Balu Cables vs. O/o. the Assistant Commissioner of GST & Central Excise (W.P.(MD)No.11924 of 2024) and stated their readiness to deposit 25% of the disputed tax to obtain a final opportunity to present their objections. Respondents' Arguments: The respondents (represented by the Additional Government Pleader) submitted that notices were issued in Form GST DRC-01 and personal hearings were offered, but the petitioner failed to respond or attend. They did not raise serious objections to the petitioner's request for a final opportunity, especially if the petitioner deposited 25% of the disputed tax.