M/S. Uga Traders vs. The Assistant Commissioner (St)

Facts

The petitioner, M/s. UGA Traders, represented by its Proprietor S.V. Rajasekar, filed two writ petitions before the Madurai Bench of the Madras High Court. The petitions challenged orders passed by the Assistant Commissioner (ST), Tuticorin -1 Assessment Circle. In W.P.(MD) No. 12228 of 2024, the impugned order dated March 13, 2024, pertained to the tax period 2018-19. In W.P.(MD) No. 12229 of 2024, the impugned order dated November 3, 2023, related to the tax period 2017-18. The petitioner sought to quash these orders and requested a fresh assessment with an opportunity for a personal hearing. The petitioner admitted to receiving notices in Form GST DRC-01 on August 28, 2023, and September 21, 2023, but failed to respond to them, leading to the impugned orders. Recovery proceedings were initiated, prompting the petitioner to approach the court.

Held

The Court quashed the impugned orders passed by the respondent for both tax periods (2018-19 and 2017-18). The Court noted that the petitioner failed to respond to the notices in Form GST DRC-01, which led to the passing of the impugned orders. However, considering the petitioner's willingness to deposit 10% of the disputed tax within 30 days of receiving the order, and their undertaking to file a reply within the same period, the Court set aside the orders. The quashed orders were to be treated as an addendum to the show cause notices. The Court directed the respondent to re-do the assessment afresh after the petitioner complies with the deposit and filing requirements. The petitioner was also expected to cooperate with the respondent in the fresh assessment proceedings. The Court expressly left undecided any issues related to the merits of the assessment itself, focusing solely on the procedural defect.

Key Issues

1. Whether the impugned assessment orders passed by the respondent are liable to be quashed for non-compliance with the principles of natural justice, specifically the lack of a personal hearing, as per the provisions of the GST Act? The petitioner argued that the impugned orders were passed without providing a proper opportunity for a personal hearing, violating the principles of natural justice. They contended that despite receiving notices in Form GST DRC-01, they failed to respond due to oversight and rushed to court only upon initiation of recovery proceedings. The petitioner sought a fresh assessment with an opportunity to present their case. The respondent, represented by the Additional Government Pleader, did not present any specific arguments against the petitioner's plea for a personal hearing. The court's order indicates that the respondent consented to setting aside the impugned orders.