M/S. Sagar Brush Industries vs. The Assistant Commissioner (St) (Fac)

Held

The Court held that the impugned assessment order dated 25.04.2024 was passed in violation of the principles of natural justice. The Court noted the petitioner's submission that the show cause notice and the assessment order were uploaded to the GSTIN portal, which the petitioner was unable to access, thereby preventing them from participating in the proceedings. The Court acknowledged the petitioner's willingness to deposit 25% of the disputed tax and their request for a personal hearing to explain the discrepancies. The Court found merit in the petitioner's plea, especially considering the potential technical issues with the GST portal and the adaptation period for assessees. Consequently, the Court set aside the impugned order. The petitioner was directed to deposit 25% of the disputed tax within two weeks, with the respondent to consider excess admitted tax payments. The impugned order was to be treated as a show cause notice, and the petitioner was to submit objections within four weeks. The respondent was directed to consider these objections and pass a fresh order in accordance with law after affording a reasonable opportunity of hearing. The Court stipulated that if the deposit or objections were not filed within the stipulated periods, the impugned order would stand revived.

Facts

The petitioner, M/s. Sagar Brush Industries, a registered dealer under the GST Act, filed a writ petition challenging an assessment order dated 25.04.2024 passed by the Assistant Commissioner (ST) (FAC), Thirupparankundram Assessment Circle. The assessment order was issued following an audit for the period 2017-2018 to 2021-2022, which identified discrepancies for the period 2018-2019 between GSTR-3B and GSTR-1, and between GSTR-3B and GSTR-2A. A show cause notice (DRC-01) was issued, and the impugned order confirmed the proposed demand. The petitioner contended that the show cause notice and the assessment order were not served via tender or RPAD but were uploaded to the GSTIN portal, which they were unable to access, thus preventing participation in the proceedings. The petitioner stated they could explain the discrepancies if given an opportunity and were willing to deposit 25% of the disputed tax.

Key Issues

1. Whether the assessment order dated 25.04.2024, passed by the respondent, is liable to be quashed for violation of the principles of natural justice, specifically for non-service of notices and the final order on the petitioner, and for denying the petitioner an opportunity to be heard, as per Article 226 of the Constitution of India? Petitioner's Arguments: The petitioner argued that the assessment order is arbitrary and illegal because neither the show cause notice nor the final assessment order was properly served. They were uploaded to the GSTIN portal, which the petitioner could not access, thereby preventing them from participating in the adjudication. The petitioner claimed that they could explain the discrepancies between GSTR-3B and GSTR-1, and GSTR-3B and GSTR-2A if given a personal hearing. 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 attributed the inability to respond to technical glitches in the GST portal and the learning curve for e-mechanisms. They offered to pay 25% of the disputed tax. Respondent's Arguments: The learned Additional Government Pleader appearing for the respondent did not have any serious objection to the petitioner's request for a fresh opportunity, particularly regarding the adjustment of excess admitted tax payments towards the 25% disputed tax.