Tvl Chellam Motors Private Limited vs. The State Tax Officer V (Roving Squad)
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The petitioner, Tvl.Chellam Motors Private Limited, filed a writ petition challenging an assessment order for the year 2022-23, a rejection order of a rectification application, and a consequential Form GST DRC-07. These orders were passed by the 1st and 2nd respondents, who are State Tax Officers. The petitioner contended that the assessment order was arbitrary and contrary to statutory provisions and circulars. The impugned orders include GSTIN. 33AAGCC2404D2ZE/2022-23 dated 30.09.2024 and Reference No. ZD330924198629N dated 30.09.2024, along with rejection orders dated 05.12.2024. The petitioner sought to quash these orders as arbitrary, void, and violative of constitutional rights.
Held
The Court held that the impugned assessment order suffers from the vice of arbitrariness. This was primarily due to the Assessing Officer's failure to make a determination of the tax payable by the petitioner, as envisaged under Section 74 of the Tamil Nadu Goods and Services Tax Act, 2017. Additionally, the Court noted that the guidelines issued in Circular No. 8/2024 dated 29.08.2024 by the Commissioner of State Tax were not followed. The Court found these procedural lapses to be significant enough to warrant interference with the order. The ratio decidendi is that assessment orders must strictly adhere to statutory requirements and follow relevant circulars to avoid being deemed arbitrary. Consequently, the Court allowed the writ petition, set aside the impugned order, and remitted the matter back to the first respondent for fresh consideration. The petitioner was directed to file a reply within two weeks, after which the first respondent is to provide a hearing and pass a reasoned order within eight weeks.
Key Issues
1. Whether the assessment order for the year 2022-23 is liable to be quashed for not adhering to the provisions of Section 74 of the Tamil Nadu Goods and Services Tax Act, 2017, which mandates a determination by the Assessing Officer based on a show cause notice proposal. 2. Whether the assessment order is liable to be quashed for failing to follow Circular No. 8/2024 dated 29.08.2024, issued by the Commissioner, State Tax. Petitioner's arguments: The petitioner argued that the Assessing Officer failed to make a determination of the tax payable as required under Section 74 of the Act. Furthermore, the Assessing Officer did not follow the guidelines stipulated in the Commissioner's Circular dated 29.08.2024. These omissions rendered the impugned order arbitrary and liable for interference. Respondents' arguments: The judgment does not record any specific arguments made by the respondents.
Sections Cited
Section 74, Section 168A
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Before: and
The challenge in the writ petition is to the assessment order of the year 2022-23. 2. The Primordial contention of the learned counsel for the petitioner is that neither the provisions of Section 74 of the Tamil Nadu Goods and Services Tax Act, 2017 (hereinafter referred to as “the Act”) _________ https://www.mhc.tn.gov.in/judis which envisages a determination by the Assessing Officer of the proposal made under the show cause notice has been invoked, nor the circular issued by the Commissioner, State Tax, Commercial Taxes Department, Ezhilagam, Chennai, in Circular No.8/2024, dated 29.08.2024 has been followed by the Assessing Officer while issuing the order of demand.
A perusal of the order impugned herein would also show that the Assessing Officer had not made any determination of the tax payable by the petitioner as envisaged under Section 74 of the Act, nor has followed the guidelines issued in Circular dated 29.08.2024 of the Commissioner of State Tax. In such view of the matter, I am of the view that the order impugned suffers from vice of arbitrariness. For the said reason, the order impugned is liable to be interfered with.
In fine, this Writ Petition is allowed, the impugned order is set aside and the matter is remitted back to the first respondent for fresh consideration. The petitioner shall file his reply along with supporting documents within a period of two weeks from the date of receipt of a _________ https://www.mhc.tn.gov.in/judis copy of this order and thereafter, the first respondent shall provide an opportunity of hearing to the petitioner and pass a reasoned order on merits and in accordance with law within a period of eight weeks thereafter. There shall be no order as to costs. Consequently, connected miscellaneous petitions are closed.
2025 NCC : Yes/No Index : Yes/No Internet : Yes abr To 1.The State Tax Officer-V (Roving Squad), Office of the Joint Commissioner (ST), Commercial Taxes Department, Intelligence Trichy Division, Trichy-620 008. 2.The Commercial Tax Officer, Office of the Joint Commissioner (ST), Commercial Taxes Department, Intelligence Trichy Division, Trichy-620 008. _________ https://www.mhc.tn.gov.in/judis K.KUMARESH BABU, J. abr Dated: 21.01.2025 _________ 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.