Tvl. Theni Gurus Textiles And Readymades vs. The Deputy State Tax Officer-1

Facts

The petitioner, Tvl.Theni Gurus Textiles and Redymades, represented by its Proprietor G.A.M.Thandapani, filed a writ petition challenging an order dated 15.02.2024 passed by the Deputy State Tax Officer-1, Theni. This order pertained to the assessment year 2018-19 and followed a notice in Form ASMT-10 dated 24.12.2021, a GST DRC-01 dated 16.02.2022, and personal hearing notices dated 13.03.2023 and 18.01.2024. The petitioner contended that due to being a small-scale operator, they were unaware of the notices and the impugned order posted on the GST common portal and thus did not respond. They sought an opportunity to explain their case.

Held

The Court held that while the respondent raised contentions regarding the writ petition being time-barred and the availability of appellate remedies, the petitioner might have a case on merits. Exercising discretion partly in favour of the petitioner, the Court quashed the impugned order dated 15.02.2024. The case was remitted back to the respondent for passing a fresh order. This was made conditional upon the petitioner depositing 25% of the disputed tax to the credit of the respondent from its Electronic Cash Register within 30 days of receiving the order. The impugned order, now quashed, was to be treated as an addendum to the show cause notice. The petitioner was directed to file a reply within 30 days of receiving the order, along with the deposit. The respondent was then to pass a fresh order on merits after hearing the petitioner, preferably within two months. No issue was expressly left undecided.

Key Issues

1. Whether the impugned order dated 15.02.2024, passed for the assessment year 2018-19, is liable to be quashed on the grounds of violation of the Principles of Natural Justice, specifically the lack of a proper opportunity of personal hearing for the petitioner? The petitioner argued that they were unaware of the notices and the final order due to their status as a small-scale operator and the portal-based communication, and therefore, they should be granted an opportunity to present their case. The respondent contended that the writ petition is hopelessly time-barred due to laches, citing the Supreme Court's decision in Assistant Commissioner (CT) LTU, Kakinada and others vs. Glaxo Smith Kline Consumer Health Care Limited. Furthermore, the respondent argued that the appellate remedy is also time-barred under Section 107 of the respective GST Enactments, referencing Singh Enterprises Vs. Commissioner of Central Excise, Jamshedpur and others, and thus the writ petition should be dismissed.