M/S.Eminent Textiles Mills Private Limited vs. The State Tax Officer

Facts

The petitioner, M/s. Eminent Textiles Mills Private Limited, filed a writ petition challenging an assessment order dated 21.01.2025 for the tax period 2019-2020, passed by the State Tax Officer (first respondent). The petitioner contended that the assessment order was passed without sufficient opportunity, violating principles of natural justice. They became aware of the proceedings only after receiving the assessment order dated 30.08.2024. Subsequently, the petitioner filed a rectification application on 29.11.2024 under Section 161 of the TNGST Act, seeking to rectify an error and provide evidence of ITC reversal and tax adjustments. This application was rejected by the adjudicating authority on 21.01.2025, stating that amendments or reversals were not made in GSTR-3B, which the petitioner claims was erroneous. The revenue argued that due process was followed and that the petitioner has an appeal remedy under Section 107 of the TNGST Act.

Held

The Court noted the submission by the learned Government Advocate that the petitioner has an appeal remedy before the Deputy Commissioner (ST) GST Appeal, Tirunelveli, under Section 107 of the TNGST Act, 2017. Consequently, the Court disposed of the writ petition by granting liberty to the petitioner to approach the appellate authority. The petitioner was directed to raise all grounds raised in the writ petition before the appellate authority. The appellate authority was instructed to entertain the appeal if filed within two weeks from the date of receipt of the order and dispose of it in accordance with law within one month thereafter. The Court also ordered the respondents to maintain the status quo prevailing as on the date of the order until the appeal is disposed of. No order as to costs was made. The issue of whether the assessment order violated natural justice or if the rectification application was erroneously rejected was not directly decided by the High Court, as it directed the petitioner to the appellate forum.

Key Issues

1. Whether the assessment order dated 21.01.2025, passed by the first respondent, violates the principles of natural justice by not providing sufficient opportunity to the petitioner? (Question of law) 2. Whether the rejection of the rectification application dated 29.11.2024 by the first respondent on 21.01.2025, under Section 161 of the TNGST Act, 2017, was erroneous, given the petitioner's submission of evidence for ITC reversal and tax adjustments in GSTR-3B? (Question of mixed law and fact) Petitioner's arguments: The assessment order was passed without affording sufficient opportunity, violating natural justice. The rectification application was wrongly rejected as the petitioner had indeed made amendments and reversals in GSTR-3B, supported by evidence. The rejection order failed to consider this evidence. Revenue's arguments: The assessment order was passed following due process. The petitioner has an alternative statutory remedy of appeal before the Deputy Commissioner (Appeals) under Section 107 of the TNGST Act, 2017, and should have availed it instead of approaching the High Court directly.