J K Engineering And Electro Platers vs. The Assistant Commissioner (St)- Ii

Held

The Court held that the petitioner's contention that a reply was filed and acknowledged by the respondent on 14.10.2020 is prima facie acceptable, supported by evidence of the respondent's acknowledgment. While Rule 142(1) permits online issuance of DRC-01 notices, the Court found that the respondent failed to consider the petitioner's earlier detailed reply dated 14.10.2020, which was submitted just five days before the online DRC-01 notice. The Court concluded that the respondent's statement in the assessment order, claiming no reply was filed, demonstrated a non-application of mind. Therefore, the impugned order was quashed on the ground of non-consideration of the petitioner's reply and violation of natural justice. The matter was remanded to the respondent for reconsideration, with a direction to consider the replies dated 08.10.2020 and 14.10.2020, and to provide a personal hearing if necessary.

Facts

The petitioner, J.K. Engineering And Electro Platers, is a registered dealer under the Tamil Nadu Goods and Services Tax Act, 2017. For the tax period of June 2017, the respondent, The Assistant Commissioner (ST)-II, Virudhunagar, issued a show cause notice on 21.05.2019 alleging excess Input Tax Credit (ITC) of Rs. 11,19,929/-. The petitioner replied on 08.10.2020. Subsequently, another notice was issued by the respondent on 21.02.2020, to which the petitioner submitted a second reply on 14.10.2020, acknowledging receipt by the respondent. However, the respondent issued an assessment order dated 18.11.2020, stating that no reply was filed by the petitioner to the DRC-01 notice. The petitioner filed a writ petition challenging this order.

Key Issues

1. Whether the impugned assessment order dated 18.11.2020 is illegal, arbitrary, and in violation of principles of natural justice and jurisdiction, specifically concerning the non-consideration of the petitioner's reply dated 14.10.2020, in violation of Section 140(1) of the Tamil Nadu Goods and Services Tax Act, 2017? Petitioner's arguments: The petitioner contended that they had filed a detailed reply on 14.10.2020, which was acknowledged by the respondent. The respondent's claim in the assessment order that no reply was filed is unsustainable. The petitioner argued that the assessment order was passed without considering their response, violating principles of natural justice and Section 75(4) of the Act, which mandates an opportunity of personal hearing. Respondent's arguments: The respondent argued that an online notice in Form GST DRC-01 was sent on 19.10.2020, and since the petitioner did not reply to this online notice, the assessment order was passed based on available documents. The respondent relied on Rule 142(1) of the GST Rules regarding online transmission of notices.