M/S.Jayanth Ship Chandlers vs. The State Tax Officer

Facts

The petitioners, M/s.Jayanth Ship Chandlers and M/s.Jeyanth Logistics Private Limited, filed two writ petitions before the Madurai Bench of the Madras High Court. They challenged orders dated 12.12.2023 and 26.12.2023, respectively, passed by the State Tax Officers. These orders pertained to the tax period 2017-18. The petitioners claimed they were small-scale operators and were unaware of the notices posted on the GST common portal, as well as the impugned orders themselves. The respondent revenue authorities opposed the petitions, arguing they were time-barred due to laches and that the appellate remedy was also time-barred under Section 107 of the GST Enactments.

Held

The Court, while acknowledging the respondent's arguments regarding the petitions being time-barred, exercised its discretion in favour of the petitioners. The Court found that the petitioners might have a case on merits. Consequently, the impugned orders dated 12.12.2023 and 26.12.2023 were quashed. The Court directed the petitioners to deposit 10% of the disputed tax to the credit of the respective respondents from their Electronic Cash Register within 30 days. The quashed orders were to be treated as addendums to the preceding show cause notices. The petitioners were given 30 days from the receipt of the order to file their reply. The respondents were directed to pass fresh orders on merits and in accordance with law, preferably within three months, after providing the petitioners with an opportunity of being heard. The issue of whether the appellate remedy was available and within limitation was implicitly addressed by the Court's decision to grant relief, despite the respondent's arguments.

Key Issues

1. Whether the writ petitions are maintainable on grounds of laches and being time-barred, considering the delay in challenging the impugned orders passed for the tax period 2017-18? (Question of law) 2. Whether the principles of natural justice were violated by the respondent authorities in passing the impugned orders without providing an opportunity for a personal hearing to the petitioners? (Question of mixed law and fact) Petitioner's arguments: The petitioners contended that they were small-scale operators and genuinely unaware of the notices and orders communicated through the GST common portal. They sought an opportunity to present their case and argued for a fresh assessment after a personal hearing. Respondent's arguments: The respondent revenue authorities argued that the writ petitions were hopelessly time-barred and suffered from laches. They relied on the Supreme Court's decisions in Assistant Commissioner (CT) LTU, Kakinada and others vs. Glaxo Smith Kline Consumer Health Care Limited and Singh Enterprises Vs. Commissioner of Central Excise, Jamshedpur and others to support their contention that the appellate remedy under Section 107 of the GST Enactments was also time-barred, making the writ petitions liable for dismissal.