Tvl Meenakshi Marketing Pouch World vs. The Deputy State Tax Officer

Held

The Court held that the respondent authority had failed to comply with the mandatory provisions of Section 67(5) of the GST Act. The petitioner's argument that copies of seized documents were not furnished before adjudication was accepted, especially in light of the respondent's concession. The Court found that this procedural lapse rendered the assessment order illegal and arbitrary. Consequently, the impugned order dated October 5, 2023, was set aside. The respondent was directed to furnish the required documents to the petitioner within four weeks of receiving a copy of the order. Thereafter, the respondent was to provide an opportunity to the petitioner to present their case and pass a fresh order in accordance with law, considering the petitioner's representation, within four weeks of the petitioner's submission. No costs were imposed.

Facts

The petitioner, Tvl Meenakshi Marketing Pouch World, a GST-registered dealer, was subjected to an inspection by the Commercial Tax Department's Intelligence Wing on March 17-18, 2021. The inspection identified discrepancies including omission of interstate inward supply, omission of outward supply, stock difference, and purchase suppression. A notice in Form DRC-01A was issued on November 25, 2022, detailing these discrepancies. The petitioner submitted a representation on November 27, 2023. Subsequently, the respondent, the Deputy State Tax Officer, passed an assessment order dated October 5, 2023, without apparently considering the petitioner's representation. The petitioner challenged this order through a writ petition.

Key Issues

1. Whether the respondent authority failed to comply with the provisions of Section 67(5) of the GST Act by not furnishing copies of seized documents to the petitioner before adjudication, thereby vitiating the assessment order? Petitioner's arguments: The petitioner contended that Section 67(5) of the GST Act mandates that the person from whose custody documents are seized is entitled to make copies or take extracts in the presence of an authorised officer, unless it prejudicially affects the investigation. The petitioner argued that despite this provision and a specific averment in their reply dated March 20, 2023, to a notice dated September 1, 2022, the respondent proceeded to pass the assessment order without providing the required documents. Respondent's arguments: The learned Government Advocate for the respondent fairly conceded that the documents required under Section 67(5) of the Act had not been provided to the petitioner.