M/S Sri Kaleeswari Stores vs. The Assistant Commissioner (St)
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The petitioner, M/s. Sri Kaleeswari Stores, filed a writ petition challenging an order in Form DRC-07 dated 30.12.2023 and a consequential notice in Form DRC-13 dated 16.05.2024, passed by the Assistant Commissioner (ST), Kumbakonam. The petitioner contended that the assessment order was made beyond the scope of the show cause notice issued. Furthermore, the show cause notice invoked Section 74 of the Tamil Nadu Goods and Services Tax (TNGST) Act, 2017, without specifying the necessary ingredients for proceedings under that section. The petitioner argued that Section 74 was invoked solely due to the expiry of the time limit for proceedings under Section 73.
Held
The Court held that it is a settled principle that a recipient of a show cause notice is only obligated to respond to the specific details provided therein. If an order is passed beyond the scope of the show cause notice, it cannot be sustained. The Court found that the impugned order was passed in violation of the principles of natural justice because the petitioner was not put on notice regarding the matters decided beyond the scope of the show cause notice. Additionally, the show cause notice did not contain the necessary ingredients for initiating proceedings under Section 74 of the TNGST Act. While the respondent argued that a Government Order extended the time limit for proceedings under Section 73, and the petitioner had not challenged this order, the Court set aside the impugned order. The matter was remitted back to the authority, directing that the show cause notice be treated as issued under Section 73 of the TNGST Act. The petitioner was directed to file a reply within two weeks, and the respondent was to proceed after affording an opportunity of hearing.
Key Issues
1. Whether the assessment order passed by the respondent is vitiated for being beyond the scope of the show cause notice issued, thereby violating principles of natural justice, as argued by the petitioner? 2. Whether the show cause notice, which invoked Section 74 of the TNGST Act, 2017, failed to specify the ingredients required for proceedings under that section, as contended by the petitioner? 3. Whether the proceedings initiated under Section 74 were necessitated by the belated initiation of proceedings, as argued by the petitioner, or whether the time limit for initiation under Section 73 was extended by Government Order, as argued by the respondent? Petitioner's arguments: The assessment order exceeded the scope of the show cause notice, violating natural justice. Section 74 of the TNGST Act was invoked without specifying its ingredients, and only because the time limit for Section 73 had expired. Respondent's arguments: The impugned order is appealable under Section 107 of the TNGST Act. A Government Order (G.O.(Ms) No.41 dated 05.04.2023) extended the time limit for initiating proceedings under Section 73 of the TNGST Act until 30.12.2023, making the initiation well within time even if treated as under Section 73.
Sections Cited
Section 73, Section 74, Section 107
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Before: and
It is the case of the learned counsel for the petitioner that the assessment order had been made beyond the show cause issued to the petitioner and also that the show cause notice has been issued invoking the powers of Section 74 of the Tamil Nadu Goods and Services Tax Act, 2017 (hereinafter referred to as “the TNGST Act”), whereas the ingredients of Section 74 of the TNGST Act have not been even specified in the show cause notice. Only because there was a belated initiation of proceedings and as the time limit for initiation of proceedings under Section 73 of the TNGST Act was long over, the proceedings had been initiated under Section 74 of the TNGST Act. Therefore, he seeks interference of the orders impugned herein.
The learned Additional Government Pleader, on the other hand, would submit that the order impugned is an appealable order and the said _________ https://www.mhc.tn.gov.in/judis issue can also be raised before the appellate authority under Section 107 of the TNGST Act. He would further submit that as regards the delay in initiation, the Government in G.O.(Ms) No.41, Commercial Taxes and Registration (B1) Department, dated 05.04.2023, extended the time limit in respect of assessment year 2017-2018 even to initiate action under Section 73 of the TNGST Act till 30.12.2023. In view of the same, even if it is to be treated as notice under Section 73, it is well within the time limit. Hence, he would submit that no interference is required to be made in the order impugned in this writ petition.
I have considered the rival submissions made by the learned counsel on either side.
It is trite law that the recipient of a show cause notice is only bound to answer to the details given in the show cause notice and that if any order is passed by the person issuing the show cause notice beyond the scope of the show cause notice, the same cannot be sustained. For the simple reason that an order had been passed in violation of the _________ https://www.mhc.tn.gov.in/judis principles of natural justice, as the recipient was not on notice with regard to the order passed in excess to the show cause notice, the order impugned is liable to be set aside. Further, a reading of the show cause notice issued by the respondent under DRC-01 would not indicate the ingredients required for initiation of proceedings under Section 74 of the TNGST Act. The learned Additional Government Pleader brought to the notice that even under G.O.(Ms) No.41, time limit had been extended for initiation of proceedings under Section 73 and that even treating this show cause notice under Section 73, it is well within the time. The petitioner had not challenged the Government Order in G.O.(Ms) No.
In such view of the matter, the impugned order is set aside and the matter is remitted back to the authority by considering the said show cause notice as the show cause notice issued under Section 73 of the TNGST Act and thereafter, to proceed in accordance with law. The petitioner shall submit his reply to the show cause notice dated 29.09.2023 treating the same as has been issued under Section 73 of the TNGST Act, 2017 within a period of two weeks from the date of receipt of a copy of this order and thereafter, the respondent, after affording an opportunity of _________ https://www.mhc.tn.gov.in/judis hearing as prescribed under law, shall pass orders on merits and in accordance with law.
In fine, this Writ Petition is allowed. 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 The Assistant Commissioner (ST), Kumbakonam Town Assessment Circle, Kumbakonam, Thanjavur District. _________ https://www.mhc.tn.gov.in/judis K.KUMARESH BABU, J. abr Dated: 08.01.2025 _________ 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.