M/S. Eci Engineering And Constructions Co. LTD vs. Assistant Commissioner (St)

Held

The Court allowed the Writ Petition and set aside the impugned Final Assessment Order dated March 30, 2019. The matter was remanded back to the 1st respondent for fresh consideration. The Court found that the impugned order appeared to be passed in violation of the principles of natural justice because the petitioner was faulted for not producing documentary evidence (LR copies, sale invoices, purchase orders) which it was never asked to produce by the 1st respondent. The petitioner was directed to produce all available materials in support of its claim for exemption within two weeks of receiving the order. The 1st respondent is to decide the matter afresh in accordance with the law. The Court did not expressly leave any issue undecided, as the matter was remanded for a complete re-adjudication.

Facts

The petitioner, Sri Y.Sreenivasa Reddy, filed a Writ Petition challenging the Final Assessment Order dated March 30, 2019, passed by the 2nd respondent (authority). The assessment order determined that the goods dealt with by the petitioner were subject to tax at 14.5%. The petitioner contended that it deals in parts of transmission towers, which fall under entry 64 of Schedule IV to the GST Act, 1956, and that its turnover relates to transit sales, entitling it to exemption. The petitioner also claimed it only received one show-cause notice (July 15, 2017) and not another (January 19, 2018), and that the assessment order faulted it for not producing documentary evidence like LR copies, sale invoices, and purchase orders, which were never requested. The petitioner argued that even if not exempted, the tax rate should be 5%, not 14.5%.

Key Issues

1. Whether the Final Assessment Order dated March 30, 2019, passed by the 2nd respondent is vitiated by a violation of the principles of natural justice, specifically by faulting the petitioner for not producing documentary evidence that was not demanded? (Mixed question of law and fact, concerning principles of natural justice and procedural fairness). Petitioner's Arguments: - The petitioner received only one show-cause notice and not the second one mentioned in the impugned order. - The assessment order erroneously found fault for non-production of documents like LR copies, sale invoices, and purchase orders, as these were never requested by the assessing authority. - The assessment order lacks reasoning for its conclusion regarding variations in 'C' Forms and 'E1' Forms. - Even if not exempted, the applicable tax rate should be 5%, not 14.5%. Revenue's Arguments: - The Special Standing Counsel for Commercial Taxes suggested remanding the matter back to the 1st respondent for reconsideration, allowing the petitioner an opportunity to produce all documentary evidence.