Tvl.Natarajan Patchirajan vs. The State Tax Officer
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The petitioner, Natarajan Patchirajan, filed a writ petition challenging an order dated 06.06.2023 passed by the State Tax Officer, Theni 2 Assessment Circle. The order pertains to the assessment year 2018-19. The petitioner did not participate in the show cause proceedings or file a statutory appeal within the prescribed time. The petitioner's counsel argued that the tax liability under the TNVAT Act, 2006 was incorrectly included for determining the tax liability under the GST Act, effective from 01.07.2017. The petitioner also contended that VAT turnover should not be included in GST turnover merely by comparing it with departmental returns like Form GSTR 7B filed by Andipatti Panchayat.
Held
The Court decided to quash the impugned order dated 06.06.2023 passed by the State Tax Officer. The reasoning was based on the petitioner's submissions that the VAT turnover was incorrectly included in the GST turnover for the assessment year 2018-19. While the petitioner failed to file a statutory appeal in time and did not provide a proper explanation, the Court, in its discretion, chose to favour the petitioner. The Court directed the respondent to pass a fresh order on merits and in accordance with law. This decision is based on the principle that tax liabilities must be correctly determined under the applicable laws, and incorrect inclusion of past tax regime turnovers can lead to arbitrary assessments. The impugned order is to be treated as an addendum to the notice in Form GST DRC 01 dated 24.08.2022. The respondent is expected to pass the fresh order within three months. The petitioner is required to deposit 10% of the disputed tax within 30 days.
Key Issues
1. Whether the impugned order dated 06.06.2023, passed by the State Tax Officer, Theni 2 Assessment Circle, for the assessment year 2018-19, is liable to be quashed as cryptic, illegal, arbitrary, and without jurisdiction? (Question of law and fact, turning on principles of natural justice and proper assessment under GST law). Petitioner's arguments: The petitioner argued that the respondent incorrectly included amounts taxable under the TNVAT Act, 2006, for determining the tax liability under the GST Act from 01.07.2017. The petitioner further contended that VAT turnover cannot be merged with GST turnover based solely on departmental returns like Form GSTR 7B. The petitioner also implicitly argued that the order was passed without proper consideration of these facts, making it arbitrary and illegal. Respondent's arguments: The respondent did not explicitly record arguments in the judgment. However, the respondent's role as the issuing authority of the impugned order implies a defense of its validity.
Sections Cited
Section 73, Section 129, Rule 86A
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Before: and
Heard Mr.S.Karunakar, learned counsel for the petitioner and Mr.J.K.Jayaseelan, learned Government Advocate for the respondent. 2.The petitioner neither participated in the show cause proceeding nor filed any statutory appeal in time and has now filed this writ petition challenging the impugned order dated 06.06.2023. 3.There is no proper explanation also forthcoming from the petitioner as to why the statutory appeal was not filed in time except stating that the petitioner had handed over the papers to the Sale Tax Practitioner/GST Practitioner to file an appeal, but was not filed. 4.That apart, the learned counsel for the petitioner would submit that the amount taxable under the TNVAT Act, 2006 has been included for the purpose of determining the tax liability of the petitioner under the GST Act with effect from 01.07.2017. 2/5 https://www.mhc.tn.gov.in/judis
It is submitted that the VAT turn over cannot be included into the GST turn over merely by making a comparison with the returns filed by the Department, namely Andipatti Panchayat in Form GSTR 7B. 6.Having considered the submissions made by the learned counsel for the petitioner and the learned Government Advocate for the respondent, this Court is inclined to exercise its discretion in favour of the petitioner by quashing the impugned order and by remitting the case back to the respondent to pass a fresh order on merits and in accordance with law subject to the petitioner depositing 10% of the disputed tax within a period of 30 days from the date of receipt of a copy of this order. 7.The impugned order, which stands quashed, shall be treated as addendum to the notice issued in Form GST DRC 01 dated 24.08.2022. It is expected that the respondent shall pass a fresh order on merits and in accordance with law within a period of 3 months thereafter. 3/5 https://www.mhc.tn.gov.in/judis
The Writ Petition stands allowed, accordingly. No costs. Consequently, connected Miscellaneous Petition is closed. Index : Yes / No 13.06.2024 Internet : Yes / No mm To The State Tax Officer, Theni 2 Assessment Circle, Commercial Taxes Buildings, Trichy 620 001. 4/5 https://www.mhc.tn.gov.in/judis C.SARAVANAN, J.
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2024 5/5 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.