V S Palanivel vs. The Deputy State Tax Officer -1
Original PDF →Facts
The petitioner, V.S.Palanivel, filed four writ petitions challenging assessment orders passed by the Deputy State Tax Officer/Deputy Commercial Tax Officer for the tax periods 2018-19, 2019-20, 2020-21, and 2021-22. The total disputed demand across these periods amounts to Rs. 1,27,12,778.48. The petitioner contended that the orders were passed in violation of natural justice, as they failed to respond to notices. Specific grievances included the invocation of Section 74 for the 2018-19 assessment year without proper grounds, a non-speaking order for 2019-20, a demand confirmed under Section 74 despite the show cause notice being under Section 73 for 2020-21, and confirmation of tax beyond the scope of the show cause notice (which only mentioned interest) for 2021-22. The petitioner had already paid Rs. 25,00,000 and Rs. 50,000 for the 2019-20 and 2020-21 periods respectively.
Held
The Court held that while the petitioner had a case to explain, the respondent's contention regarding the petitioner's failure to respond to notices was also noted. To balance the interests of both parties, the Court decided to set aside the impugned orders on terms. The Court reasoned that providing an opportunity for the petitioner to present their case would serve the interest of justice. The impugned orders were quashed and would be treated as addendums to the respective show cause notices. The petitioner was directed to deposit 10% of the disputed tax into the Electronic Cash Register within 30 days of receiving the order and also to file a reply within the same period. Failure to comply with these directions would result in the dismissal of the writ petitions, allowing the respondent to proceed accordingly. The Court did not expressly leave any issue undecided.
Key Issues
1. Whether the impugned orders were passed in gross violation of the principles of natural justice, specifically concerning the petitioner's failure to respond to notices and the respondent's alleged failure to provide adequate opportunities for hearing, as contemplated under the GST Act? 2. Whether the respondent correctly invoked Section 74 of the GST enactments for the assessment year 2018-19, considering the petitioner's argument that the necessary ingredients for such invocation were absent? 3. Whether the impugned order for the assessment year 2019-20 is a non-speaking order, rendering it liable for quashing? 4. Whether the demand for the assessment year 2020-21, confirmed under Section 74, was valid when the preceding show cause notice was issued under Section 73 of the GST enactments? 5. Whether the tax demand for the assessment year 2021-22, confirmed in the impugned order, was permissible when the show cause notice was limited to interest for belated payment and did not cover the alleged variance in returns? Petitioner's arguments: The petitioner argued that the assessment orders were illegal, without jurisdiction, and violated natural justice. They sought a fresh opportunity to present their case. They specifically pointed out the procedural irregularities in invoking different sections and issuing non-speaking orders. Respondent's arguments: The respondent contended that the petitioner neglected to participate in the show cause proceedings despite notices being sent via the GST portal and registered post. The respondent also argued that the petitioner had an alternative remedy under Section 107 of the GST enactments and should be relegated to filing a statutory appeal.
Sections Cited
Section 74, Section 73, Section 107
AI-generated summary — verify with the full judgment below
Before: and
Heard together (4 matters)
Read from the judgment's own cause title. This page is filed under one of them.
By this common order these four Writ Petitions are taken up for disposal.
In these Writ Petitions, the petitioner has challenged the respective assessment orders as detailed below: W.P. (MD)Nos. Assessment Year Impugned order/Date Amount paid before passing impugned order Rs. Total Demand Rs. 16615 of 2024 2018-19 33AHHPP7222R2ZS/06.02.2024 65954 16616 of 2024 2019-20 ZD3301241307310/29.01.2024 25,00,000 60,91,278 16617 of 2024 2020-21 33AHHPP7222R2ZS/31.01.2024 50,000 65,53,168.48 16618 of 2024 2021-22 33AHHPP7222R2ZS/06.02.2024 2,378 Total 1,27,12,778.48
The specific case of the petitioner is that the petitioner has failed to respond to the respective notices that preceded the respective impugned orders and there is a gross violation of principles of natural justice.
It is submitted that as far as the impugned order for the assessment year 2018-19 is concerned, the impunged order has been passed under Section 74 of the respective GST enactments, eventhough there are no ingredients that are 4/10 https://www.mhc.tn.gov.in/judis
W.P.(MD) Nos.16615 to 16618 of 2024 available for invoking the machinaries under Section 74 of respective GST enactments.
As far as the impugned order for the assessment year 2019-20 is concerned, it is submitted that the impugned order is a non-speaking order.
As far as the demand that has been confirmed for the assessment year 2020-21 is concerned, it is submitted that the show cause notice that preceded the impugned order was under Section 73 of the respective GST enactments. However, the demand has been confirmed under Section 74 of the respective GST enactments.
As far as the assessment year 2021-22 is concerned, it is submitted that the show cause notice that was issued to the petitioner was confined only to the interest for the belated payment of tax, however, the tax has been further confirmed in the impugned order based on the alleged variance in the Return filed by the petitioner in GSTR 3B and the information gathered from GSTR 07. 5/10 https://www.mhc.tn.gov.in/judis
W.P.(MD) Nos.16615 to 16618 of 2024
The learned counsel for the petitioner further submits that the petitioner had already paid a sum of Rs.25,00,000/- and Rs.50,000/- for the assessment years 2019-20 and 2020-21, respectively before passing the impugned order. As per the impugned orders, the balance of Rs.1,27,12,778.48/- remains to be paid by the petitioner towards tax, penalty and interest.
It is submitted that the petitioner may be given one opportunity to respond by giving fresh representation and provide fresh opportunity by setting aside the impugned orders.
On the other hand, the learned Additional Government Pleader for the respondent submits that the petitioner has neglected in not participating in the show cause proceedings. Not only the notices were sent to the petitioner through the GST common portal, but also by registered post. However, the petitioner failed to respond to the same.
It is submitted that the petitioner has an alternative remedy before the Appellate Deputy Commissioner and therefore, the petitioner should be relegated 6/10 https://www.mhc.tn.gov.in/judis
W.P.(MD) Nos.16615 to 16618 of 2024 to file statutory appeal under Section 107 of the respective GST enactments.
Having considered the arguments advanced by the learned counsel for the petitioner and the learned Additional Government Pleader for the respondent, the Court is of the view that the petitioner may have a case to explain and therefore, to balance the interest of the petitioner and the respondent, the Court is inclined to set aside the respective impugned orders on terms by remitting the cases back to the respondent to pass a fresh order, subject to the petitioner depositing 10% of the disputed tax to the credit of the respondent from its Electronic Cash Register.
The impugned orders, which stand quashed, shall be treated as addendum to the respective show cause notices that preceded the respective impugned orders.
The petitioner shall also file a reply within period of 30 days from the date of receipt of a copy of this order. In case any failure on the part of the petitioner either without depositing the said amount or filing reply within such 7/10 https://www.mhc.tn.gov.in/judis
W.P.(MD) Nos.16615 to 16618 of 2024 time, it is open for the respondent to proceed against the petitioner as all these Writ Petitions were dismissed. These Writ Petitions are disposed of with above directions. No costs. Consequently, connected miscellaneous petitions are closed. Index : Yes / No 24.07.2024 Internet : Yes / No apd To The Deputy State Tax Officer-I, Pudukottai II Assessment Circle, Pudukottai. 8/10 https://www.mhc.tn.gov.in/judis
W.P.(MD) Nos.16615 to 16618 of 2024 C.SARAVANAN, J.
apd W.P.(MD) Nos.16615 to 16618 of 2024 9/10 https://www.mhc.tn.gov.in/judis
W.P.(MD) Nos.16615 to 16618 of 2024 24.07.2024 10/10 https://www.mhc.tn.gov.in/judis
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.