M/S. Sri Ayyanar And Co vs. The Commercial Tax Officer

Held

The Court held that the impugned order dated 16.04.2024 was passed in violation of the principles of natural justice. The Court noted the petitioner's submission that they were not issued with DRC-01A and that the notices and the final order were uploaded to the GSTIN portal, which they could not access. The Court acknowledged the petitioner's willingness to deposit 25% of the disputed tax and to submit objections. The Court found merit in the petitioner's plea for an opportunity to be heard. Therefore, the Court set aside the impugned order. The petitioner was directed 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 was directed to consider these objections and pass orders in accordance with law after providing a reasonable opportunity of hearing. The Court also stipulated that if the deposit or objections were not filed within the stipulated periods, the impugned order would stand revived. The Court expressly did not decide on the merits of the alleged mismatch between GSTR-3B and GSTR-2A/2B.

Facts

The petitioner, M/s. Sri Ayyanar and Co., a dealer in consumer goods, filed a writ petition challenging an order dated 16.04.2024 passed by the Commercial Tax Officer (re-designated as State Tax Officer). The petitioner contended that the order, which was based on a mismatch between GSTR-3B and GSTR-2A/2B for the tax period 2018-19, was passed in violation of the principles of natural justice. The petitioner argued that they were not issued with DRC-01A, but rather DRC-01, and that notices and the final order were not served by tender or RPAD, but only uploaded to the GSTIN portal, which they could not access. This prevented them from participating in the adjudication proceedings. The petitioner expressed willingness to pay 25% of the disputed tax and sought an opportunity to present their objections.

Key Issues

1. Whether the impugned order dated 16.04.2024, passed by the respondent, is liable to be quashed for gross violation of the principles of natural justice, particularly concerning the procedure followed for issuing notices and the final order, and the lack of proper service on the petitioner, thereby violating the provisions of the GST Act, 2017? Petitioner's arguments: The petitioner argued that the proceedings were vitiated due to non-compliance with the prescribed procedure, specifically the absence of DRC-01A and the commencement of proceedings with DRC-01. They further contended that the notices and the impugned order were not served through conventional methods like tender or RPAD but were only uploaded to the GSTIN portal, which they were unable to access, thus denying them an opportunity to be heard. They relied on the judgment in M/s.K.Balakrishnan, Balu Cables vs. O/o. the Assistant Commissioner of GST & Central Excise. The petitioner also cited technical glitches in the GST portal and the learning curve for assessees as reasons for their inability to respond. Respondent's arguments: The learned Additional Government Pleader appearing for the respondent did not have serious objections to the petitioner's request for a fresh opportunity, provided certain conditions were met.