Pankaj Granites vs. The Assistant Commissioner (St)
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The petitioner, Pankaj Granites, represented by its proprietor Baldev Ram Jat, filed a writ petition challenging an order dated 29.04.2024 passed by the Assistant Commissioner (ST), Madurai Rural East Assessment Circle. The order pertains to the financial year 2018-2019. The petitioner, a registered supplier of granite slabs, had filed returns and paid taxes. A notice DRC-01A was issued on 15.11.2022 under Section 73(5) of the TNGST Act, 2017, alleging that the petitioner's suppliers were bill traders. The petitioner responded on 30.11.2022, denying the allegations and requesting evidence. Subsequently, the petitioner surrendered their registration certificate on 01.09.2023. Notices DRC-01 were issued on 27.12.2023, followed by the impugned assessment order and a remainder on 21.03.2024. The petitioner claims to have become aware of the assessment order only upon manual service in Rajasthan, where they had relocated after closing their business in Tamil Nadu.
Held
The Court set aside the impugned order. The reasoning was based on the submission by the learned Additional Government Pleader for the respondent, who, taking into account the peculiar facts of the case, agreed to grant the petitioner one final opportunity to present their objections along with supporting documents. The Court directed the petitioner to appear before the respondent authority on 19.09.2024 at 11:00 am with their reply and supporting material evidence. The Court stipulated that failing to appear or submit the required documents would result in the revival of the impugned order of assessment. The Court did not explicitly decide on the jurisdictional or natural justice arguments but effectively provided a chance for the petitioner to be heard, addressing the procedural shortcomings raised.
Key Issues
1. Whether the impugned order of assessment passed by the respondent authority is without jurisdiction, erroneous on facts, and violative of the principles of natural justice, as contended by the petitioner? The petitioner argued that the assessment order was passed without jurisdiction and in violation of natural justice. They contended that after submitting a reply to DRC-01A and surrendering their registration, they had no intimation of adverse findings and assumed the proposals were dropped. The petitioner also argued that proper notice was not served, especially after they had relocated to Rajasthan, preventing them from availing an opportunity to present their case. The petitioner relied on the fact that they had paid appropriate taxes and filed returns. The respondent, represented by the Additional Government Pleader, argued that Input Tax Credit (ITC) was claimed without demonstrating the genuineness of transactions. However, on instructions, the respondent conceded to granting one final opportunity to the petitioner to present their objections and supporting documents, acknowledging the peculiar facts of the case.
Sections Cited
Section 73(5)
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Before: and
The present writ petition is filed challenging the impugned order issued by the respondent in Reference No.ZD330424237911K in GSTIN: 33AIHPJ0846J1ZC, dated 29.04.2024 for the assessment year 2018-2019. 2. The petitioner was engaged in manufacturing and processing of granite slabs and during the period 2018-2019, was a registered supplier under the GST Act.
It is submitted by the learned Counsel for the petitioner that the petitioner had submitted his returns and also paid the appropriate taxes. While so, DRC-01A was issued on 15.11.2022 under Section 73(5) of the TNGST Act, 2017, which contains the intimation of the tax ascertained as payable. In response to the above notice, the petitioner submitted his reply, dated 30.11.2022, inter alia, submitting that the allegation that the petitioner's supplier were bill traders, has been made without any material evidence to 2/6 https://www.mhc.tn.gov.in/judis support the same. The petitioner sought for certain details as to the nature of the investigation and the basis for the authority to arrive at a conclusion that the petitioner's suppliers were bill traders. Thereafter, there was no response from the respondent authority and the petitioner surrendered his registration certificate on 01.09.2023. It is submitted that after the petitioner had surrendered his registration certificate, notices were issued in DRC-01 on 27.12.2023 and impugned order of assessment has been followed by a remainder on 21.03.2024. 4. It is submitted that the impugned orders of assessment have been passed confirming the proposal. It is submitted by the learned Counsel for the petitioner that the petitioner was unable to avail of the opportunity, inasmuch as having cancelled the registration certificate and having not received anything adverse pursuant to his reply, dated 30.11.2022, the petitioner was of the view that the proposals were dropped and had not checked the web portal.
It is submitted by the learned Counsel for the petitioner that the petitioner became aware of the orders of assessment only when it was served manually at Rajasthan, where the petitioner had shifted after closing down the 3/6 https://www.mhc.tn.gov.in/judis business in Tamil Nadu. It is submitted, when the respondent authority was aware of the fact while serving the order of assessment that the petitioner has shifted to Rajasthan, the notice could have also been served on the petitioner at Rajasthan, which would have enabled them to respond / reply.
The learned Additional Government Pleader for the respondent would submit that ITC has been claimed without demonstrating that the transactions were real genuine and not fictitious. However, the learned Additional Government Pleader for the respondent would submit that on instruction taking into account the peculiar facts of the case, one final opportunity would be granted to the petitioner to put-forth their objections along with the documents.
In view thereof, the impugned order is set aside. The petitioner is directed to appear before the respondent authority on 19.09.2024 at 11.00 am., along with reply and supporting material evidence. Failing which, the impugned order of assessment will stand revived. 4/6 https://www.mhc.tn.gov.in/judis
The writ petition stands disposed of, accordingly. There shall be no order as to costs. Consequently, connected Miscellaneous Petitions stand closed. 04.09.2024 NCC : Yes / No Index : Yes / No Internet : Yes BTR To The Assistant Commissioner (ST), Madurai Rural East Assessment Circle, Commercial Taxes Buildings, Dr.Thangaraj Salai Road, Madurai-625 020. 5/6 https://www.mhc.tn.gov.in/judis MOHAMMED SHAFFIQ
, J.
BTR
2024
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Reproduced from the public record of the Madras High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.