Tvl.Kamatchi Amman Hardwares vs. The State Tax Officer

Facts

The petitioner, Tvl.Kamatchi Amman Hardwares, represented by its Proprietor A.Mariammal, filed three writ petitions challenging orders dated 21.11.2023 passed by the State Tax Officer, Sengottai Assessment Circle, Tenkasi. These orders pertained to the tax periods 2018-19, 2019-20, and 2021-22. The impugned orders were preceded by notices in Form GST DRC 01A dated 27.06.2023 and Form GST DRC 01 dated 08.09.2023. The petitioner claimed to be unaware of the notices for personal hearings sent on 06.10.2023, 25.10.2023, and 07.11.2023, and the impugned orders themselves, as they were posted on the GST common portal. The petitioner attributed this lack of awareness to being a small-scale operator and unaware of the portal's functionalities.

Held

The Court decided to exercise discretion in favour of the petitioner, quashing the impugned orders. The Court found that the petitioner might have a case on merits. The reasoning was based on the petitioner's submission of being unaware of the notices and the orders due to their status as a small-scale operator and unfamiliarity with the GST common portal, which led to a potential violation of natural justice. The Court directed the petitioner to deposit 10% of the disputed tax within 30 days. The quashed order was to be treated as an addendum to the show cause notice. The petitioner was to file a reply within 30 days, after which the respondent was to pass fresh orders on merits, providing the petitioner with a personal hearing. The Court did not expressly leave any issue undecided, but the primary relief granted was based on the potential violation of natural justice, overriding the respondent's preliminary objections regarding limitation and laches.

Key Issues

1. Whether the impugned orders passed by the respondent are liable to be quashed for gross violation of the principles of natural justice, specifically for not providing an adequate opportunity of personal hearing as mandated by the GST Act? Petitioner's contention: The petitioner argued that they were unaware of the notices for personal hearings and the impugned orders, which were posted on the GST common portal. They claimed to be a small-scale operator who was not conversant with the portal's functioning, leading to a violation of natural justice. They sought a fresh assessment with an opportunity for a personal hearing. Respondent's contention: The respondent argued that the writ petitions were hopelessly time-barred and liable to be dismissed on grounds of laches, citing the Supreme Court's decision in Assistant Commissioner (CT) LTU, Kakinada and others vs. Glaxo Smith Kline Consumer Health Care Limited. The respondent also contended that the appellate remedy under Section 107 of the TNGST Act, 2017, was also time-barred, referencing Singh Enterprises Vs. Commissioner of Central Excise, Jamshedpur and others, and therefore, the writ petition should be dismissed.