Tvl.Srivari Auto Dealers vs. The State Tax Officer

Facts

The petitioner, Tvl.Srivari Auto Dealers, filed a writ petition challenging an order dated 11.07.2023 passed by the respondent, The State Tax Officer, Tuticorin 1 Assessment Circle, for the tax period 2019-20. The petitioner contended that neither the show cause notice nor the assessment order was served personally, but rather uploaded to the GSTIN portal, which their accountant failed to communicate. Consequently, the petitioner was unable to access the portal and participate in the adjudication proceedings. The core of the dispute involved an alleged mismatch between GSTR-1 and GSTR-3B returns. The petitioner expressed readiness to pay 25% of the disputed tax and sought an opportunity to explain the discrepancies.

Held

The Court held that the impugned order was passed in violation of the principles of natural justice due to the lack of proper service of notice and the assessment order on the petitioner, preventing them from presenting their case. The Court acknowledged the petitioner's submission regarding technical issues with the GST portal and their willingness to adapt. Consequently, the Court set aside the impugned order. As a condition for a fresh opportunity, the petitioner was directed to deposit 25% of the disputed tax within two weeks. Upon compliance, the impugned order would be treated as a show cause notice, and the petitioner would have four weeks to file objections with supporting documents. The respondent was directed to consider these objections and pass a fresh order after providing a reasonable opportunity of hearing. The Court stipulated that if the deposit or objections were not filed within the stipulated periods, the original assessment order would stand revived. No specific provision of the GST Act was explicitly discussed in detail, but the decision was based on the principles of natural justice inherent in the Act's procedural framework.

Key Issues

1. Whether the impugned order of assessment passed by the respondent is liable to be quashed for gross violation of the principles of natural justice, specifically for non-service of notices and the assessment order on the petitioner, thereby denying an opportunity of hearing? (Question of law and fact, turning on principles of natural justice and procedural fairness under GST law). Petitioner's Arguments: The petitioner argued that the assessment order is illegal and passed in violation of natural justice as they were not properly served with the show cause notice or the final order. They claimed technical glitches in the GST portal and the learning curve for e-mechanisms prevented timely response. 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) to support their claim for an opportunity to be heard. Respondent's Arguments: The learned Additional Government Pleader for the respondent did not raise any serious objection to the petitioner's request for a fresh opportunity, provided certain conditions were met.