Srinivas Fine Arts (P) LTD. vs. The State Tax Officer (Review)
Original PDF →Facts
M/s. Srinivas Fine Arts Private Limited (the appellant) filed writ petitions challenging assessment orders dated 09.10.2024. The appellant contended that the Assessing Officer failed to grant a personal hearing despite a specific request in their reply to the show cause notice. The respondent argued that the appellant had opted for 'no' personal hearing in Form GST DCR-06. The appellant also claimed that the Bank Realization Certificate (BRC) for export sales was uploaded, but the respondent stated it was not submitted with the reply and that this was a question of fact for adjudication. The writ court had previously directed the appellant to approach the Appellate Authority under Section 107 of the CGST Act, which led to the present writ appeals.
Held
The Court held that the Assessing Officer ought to have granted a personal hearing to the appellant. The reasoning was that when the assessee has requested a personal hearing in their reply, even if they ticked 'no' in the form, the Assessing Officer should err on the side of granting the hearing. The principle applied is that when two opinions are possible, the one advantageous to the assessee should be taken. The Court found a violation of the principles of natural justice, making the writ jurisdiction applicable as per the cited Supreme Court judgment in Assistant Commissioner of State Tax and others Vs. Commercial Steel Limited. The Court also noted the appellant's contention that the BRC was uploaded and that the absence of a personal hearing prevented them from explaining it. Consequently, the assessment orders were set aside, and the matter was remitted back to the Assessing Officer. The Assessing Officer was directed to verify the uploaded BRC, grant a personal hearing, and permit the appellant to furnish the BRC and any other intended documents. The assessment is to be completed within four months.
Key Issues
1. Whether the Assessing Officer violated the principles of natural justice by failing to grant a personal hearing to the appellant, despite a specific request in the reply to the show cause notice, even if the appellant had ticked 'no' for personal hearing in Form GST DCR-06? (Question of mixed law and fact, concerning principles of natural justice and interpretation of procedural forms). 2. Whether the Assessing Officer erred in confirming the assessment order without considering the Bank Realization Certificate (BRC) for export sales, which the appellant claimed was uploaded, and whether this issue necessitates a personal hearing? (Question of mixed law and fact, concerning evidence and procedural fairness). Contentions of the Appellant: The appellant argued that the Assessing Officer's failure to grant a personal hearing, despite a clear request, violated the principles of natural justice. They relied on their reply to the show cause notice, which explicitly prayed for a personal hearing. They also contended that the BRC was uploaded and that the absence of a personal hearing prevented them from explaining its significance and furnishing other documents. They cited the Supreme Court judgment in Assistant Commissioner of State Tax and others Vs. Commercial Steel Limited for the applicability of writ jurisdiction in cases of natural justice violation. Contentions of the Respondent: The respondent argued that the appellant had opted for 'no' personal hearing in Form GST DCR-06, and therefore, the Assessing Officer was justified in not granting one. They also submitted that the BRC was not submitted with the reply and that its submission and relevance were questions of fact to be adjudicated by the appropriate authorities, not in a writ petition.
Sections Cited
Section 107
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
COMMON JUDGMENT (Judgment of the Court was delivered by S.SRIMATHY, J.) The present batch of writ appeals are filed against the common order, dated 29.11.2024, passed in W.P.(MD)Nos.28681 to 28684 of 2024. 3/9 https://www.mhc.tn.gov.in/judis parameters stated in the order passed by the Hon'ble Supreme Court. Hence, liberty was granted to approach the Appellate Authority by filing an appeal under Section 107 of Central Goods and Services Tax Act,2017. Aggrieved over the same, the present writ appeals are filed.
The contention of the appellant is that the Assessing Officer has failed to grant an opportunity of personal hearing, thereby, violating the principles of natural justice. The Learned Counsel appearing for the appellant had relied on the reply to show cause notice, wherein the assessee has prayed for dropping the proceedings and also prayed to grant personal hearing during the 2nd or 3rd week of June for their further explanation. The said portion of the 4/9 https://www.mhc.tn.gov.in/judis
W.A(MD)Nos.6 to 9 of 2025 reply show cause notice is extracted hereunder: “Kindly consider out submissions and drop further proceedings in this regard. We may be granted personal hearing during the 2nd or 3rd week of June for our further explanations.” 5.In spite of a specific request, the Assessing Officer failed to grant personal hearing. On the other hand, the Learned Additional Government Pleader appearing for the respondent submitted that while uploading the reply, the assessee also uploaded Form GST DCR – 06, dated 01.06.2024. In the serial No.7, the option for personal hearing is available and the petitioner has opted for “no”. Hence, the Assessing Officer has not granted any personal hearing.
This Court is of the considered opinion when the assessee has opted for personal hearing, while submitting the reply, even though the assessee has ticked “no” in the Form, then the Assessing Officer ought to grant personal hearing by relying on the reply notice. Whenever two opinions are possible, the opinion which is advantageous to the assessee should be taken. 5/9 https://www.mhc.tn.gov.in/judis
W.A(MD)Nos.6 to 9 of 2025
The next contention of the appellants is that the Assessing Officer has confirmed the show cause notice on the sole ground that the assessee has not submitted the “Bank Realization Certificate” for the export sales made by the assessee. The specific contention of the assessee is that the same was uploaded at the time of submitting the reply, for which the Learned Counsel appearing for the appellant had relied on the bank realization certificate annexed in the type set of papers which runs from pages 21 to 184. The Learned Counsel specifically submitted that the said copy was downloaded from GST portal only. For this contention, the respondents submitted that the said BRC was not submitted at the time of reply and also has not stated in the reply that the certificate was uploaded. And also submitted that it is question of fact which has to be adjudicated before the appropriate authorities and not in the writ petition.
The learned Counsel appearing for the appellant vehemently replied that the certificate was not asked for in the show cause notice at all. When the respondent has not sought for the same, there is no necessity for the assessee to state in the reply that the same was furnished. And also stated that it is for this purpose alone, the petitioner has sought for personal hearing. Had 6/9 https://www.mhc.tn.gov.in/judis 7/9 https://www.mhc.tn.gov.in/judis
W.A(MD)Nos.6 to 9 of 2025 certificate that has been uploaded in the GST portal. Further the Assessing Officer shall grant personal hearing to the writ petitioner. The writ petitioner is permitted to furnish the bank realization certificate as well as any other document that the assessee is intended to furnish. The assessment may be completed within a period of 4 months from the date of receipt of a copy of this judgment.
With the above said observations, the writ appeals are allowed. No costs. Consequently, connected miscellaneous petitions are closed.
[J.N.B., J.] [S.S.Y., J.] 27.02.2025 Index : Yes / No Tmg To: The State Tax Officer (Review), Office of the Joint Commissioner (ST) (Intelligence), Virudhunagar (Intelligence), Virudhunagar. 8/9 https://www.mhc.tn.gov.in/judis
W.A(MD)Nos.6 to 9 of 2025 J.NISHA BANU, J. and S.SRIMATHY, J. Tmg W.A(MD)Nos.6 to 9 of 2025 27.02.2025 9/9 https://www.mhc.tn.gov.in/judis
Reproduced from the public record of the Madras High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.