M/S. Sri Balaji Marketing vs. The Deputy Commissioner (State Tax)

Facts

The petitioner, M/s. Sri Balaji Marketing, filed a writ petition challenging an order dated 07.03.2024 passed by the second respondent, the State Tax Officer. This order confirmed a proposal made in a notice in DRC 01 dated 19.10.2023. The petitioner contended that they had not been given an adequate opportunity to be heard and that their earlier reply dated 25.03.2023, which was in response to a notice dated 10.02.2023, was not considered. The petitioner also pointed out that a personal hearing had been held on 14.03.2023, after which the reply was filed. The impugned order stated that the petitioner had not replied to the subsequent notice dated 19.10.2023.

Held

The Court held that while the petitioner had not replied to the specific show cause notice dated 19.10.2023, they deserved a fresh opportunity to explain their case, as they had assumed their earlier reply was sufficient. The Court found that the impugned order, which confirmed the proposal in the notice, could not be said to have been passed without considering the petitioner's reply, as the petitioner had not responded to the later notice. However, to balance the interests of both parties, the Court decided to set aside the impugned order and remit the case back to the second respondent for a fresh assessment. This was made conditional upon the petitioner depositing 10% of the disputed tax from their Electronic Cash Register to the government's credit. The impugned order was to be treated as an addendum to the show cause notice, and the petitioner was granted 30 days to file a reply. The second respondent was directed to pass a fresh order within two months after hearing the petitioner.

Key Issues

1. Whether the impugned order dated 07.03.2024, passed by the second respondent, is illegal and in gross violation of the Principles of Natural Justice, specifically regarding the opportunity of a personal hearing for the petitioner for the assessment period 2021-22? Petitioner's Arguments: The petitioner argued that the impugned order was passed in violation of natural justice as they were not provided with a proper opportunity of personal hearing. They contended that their reply dated 25.03.2023, filed after a personal hearing on 14.03.2023, was not adequately considered, and they had assumed this reply was sufficient for the subsequent notice. They sought to quash the order and have a fresh assessment done with a personal hearing. Revenue's Arguments: The respondents, represented by the Additional Government Pleader, did not explicitly record arguments in the judgment. However, the judgment notes that the petitioner had not replied to the show cause notice dated 19.10.2023 issued under Section 74(1) of the GST Act, 2017, which formed the basis of the impugned order.