Tvl. Thanya Cashew Nut Factory vs. The State Tax Officer

Facts

The petitioner, Tvl. Thanya Cashew Nut Factory, filed a writ petition challenging an order dated 27.11.2023 passed by the State Tax Officer, Thuckalay. This order confirmed a demand proposed in a show cause notice dated 16.09.2023 for the assessment year 2017-18. The petitioner contended that they were unaware of the show cause notice and the accompanying detailed notice, which were allegedly not uploaded to the GST common portal. Consequently, the petitioner failed to participate in the proceedings leading to the impugned order. The respondent argued that the notice was uploaded and also sent by post, and that the writ petition was time-barred due to latches and the appellate remedy was also time-barred.

Held

The Court, having considered the arguments, was of the view that the petitioner might have a case on merits. Consequently, the Court exercised its discretion in favour of the petitioner and quashed the impugned order dated 27.11.2023. This decision was made conditional upon the petitioner depositing 25% of the disputed tax to the credit of the respondent from their Electronic Cash Ledger within 30 days of receiving the order. The quashed order was to be treated as an addendum to the original show cause notice. The petitioner was directed to file a reply within 30 days of receiving a copy of the Court's order. The respondent was then directed to pass a fresh order on merits and in accordance with law, preferably within two months, after providing the petitioner with an opportunity to be heard. The Court did not expressly leave any issue undecided.

Key Issues

1. Whether the impugned order dated 27.11.2023, passed by the respondent, is liable to be quashed for violation of principles of natural justice, specifically for not providing an opportunity of personal hearing to the petitioner? Petitioner's Arguments: The petitioner argued that they were unaware of the show cause notice (DRC-01) and the accompanying detailed notice, as these were not uploaded to the GST common portal. This lack of awareness prevented them from participating in the proceedings, thus violating the principles of natural justice. They sought a fresh assessment with an opportunity for a personal hearing. Respondent's Arguments: The respondent contended that the impugned order was validly passed as the petitioner failed to participate in the proceedings. They asserted that the notice was uploaded to the GST common portal and also sent via post. Furthermore, the respondent argued that the writ petition was hopelessly time-barred due to latches, citing the Supreme Court's decision in Assistant Commissioner (CT) LTU, Kakinada and others vs. Glaxo Smith Kline Consumer Health Care Limited. They also argued that the appellate remedy was time-barred under Section 107 of the GST Enactments, referencing Singh Enterprises Vs. Commissioner of Central Excise, Jamshedpur and others.