Merlin Ply Lam vs. The State Tax Officer / The Commercial Tax Officer
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The petitioner, Merlin Ply-Lam, filed a writ petition challenging an order dated 04.03.2024 passed by the second respondent, the State Tax Officer-3/Commercial Tax Officer (Intelligence), and a consequent summary of the order. This order was issued following an inspection under Section 67 of the Tamil Nadu Goods and Services Tax Act, which revealed alleged stock differences. The petitioner claimed they were unaware of the notices and unable to respond due to technical glitches on the GST portal and their adaptation to the e-mechanism. They contended that the stock variation was due to the valuation of old stocks at current market prices. The petitioner offered to pay 25% of the disputed tax and sought a final opportunity to present their objections.
Held
The Court set aside the impugned order dated 04.03.2024. The petitioner was directed to deposit 25% of the disputed tax within two weeks of receiving the order. Upon compliance, the impugned assessment order would be treated as a show cause notice, and the petitioner would have four weeks to submit their objections along with supporting documents. The respondent was directed to consider these objections and pass orders in accordance with law after affording a reasonable opportunity of hearing to the petitioner. The Court stipulated that if the deposit or objections were not filed within the stipulated periods, the impugned order of assessment would stand revived. The Court's reasoning was based on the petitioner's submission that they were unaware of the notices and the subsequent offer to pay a portion of the disputed tax and present their case. The principle derived is that principles of natural justice should be upheld, and parties should be given an opportunity to present their defence, especially when there are claims of non-receipt of notices and potential procedural irregularities, provided a partial deposit is made.
Key Issues
1. Whether the impugned order dated 04.03.2024, passed pursuant to an inspection under Section 67 of the Tamil Nadu Goods and Services Tax Act, is void ab initio, illegal, arbitrary, without jurisdiction, and violative of principles of natural justice, as contended by the petitioner? Petitioner's arguments: The petitioner argued that they were not aware of the notices issued by the respondents and therefore could not respond to them. They asserted that the stock variation found during the inspection was due to the valuation method adopted by the authorities, where old stocks were valued at current market prices. They also cited technical glitches on the GST portal and the learning curve for assessees adapting to the e-mechanism as reasons for their inability to respond. Reliance was placed on the High Court's judgment in M/s.K.Balakrishnan, Balu Cables vs. O/o. the Assistant Commissioner of GST & Central Excise. The petitioner also expressed willingness to deposit 25% of the disputed tax and sought a final opportunity to present their objections. Respondents' arguments: The learned Additional Government Pleader appearing for the respondents did not have any serious objection to the petitioner's request for an opportunity to present their case.
Sections Cited
Section 67
AI-generated summary — verify with the full judgment below
Before: and
The present Writ Petition has been filed challenging the impugned order, dated 04.03.2024 which was made pursuant to an inspection under Section 67 of the Tamil Nadu Goods and Services Tax Act. During the course of inspection, certain stock difference was stated to have been found and on the 2/7 https://www.mhc.tn.gov.in/judis basis of the alleged stock difference / variation, best judgment assessment was made.
It is submitted by the learned Counsel for the petitioner that they were not aware of the notices and therefore, they were unable to respond to the same. If the petitioner is granted one opportunity, they would be able to demonstrate that the stock variation is only in view of the valuation adopted by the respondent authority, whereby, the old stocks were valued at the current market price.
The learned counsel for the petitioner would place reliance upon the recent judgment of this Court in the case of M/s.K.Balakrishnan, Balu Cables vs. O/o. the Assistant Commissioner of GST & Central Excise in W.P. (MD)No.11924 of 2024 dated 10.06.2024. 4. It was also submitted by the learned counsel for the petitioner that with the introduction of GST, there were several technical glitches in the portal and the assessees were also taking time to adapt to the e-mechanism and it was only in view of the same that the petitioner was unable to respond to the above 3/7 https://www.mhc.tn.gov.in/judis notices and the order of adjudication. It was further submitted that the petitioner is ready and willing to pay 25% of the disputed tax and that he may be granted one final opportunity before the adjudicating authority to put forth their objections to the proposal, to which the learned Additional Government Pleader appearing for the respondent does not have any serious objection.
In view thereof, the impugned order is set aside and the petitioner shall deposit 25% of the disputed tax within a period of two (2) weeks from the date of receipt of a copy of this order. On complying with the above condition, the impugned order of assessment shall be treated as show cause notice and the petitioner shall submit its objections along with supporting documents/materials within a period of four (4) weeks from the date of receipt of a copy of this order. If any such objections are filed, the same shall be considered by the respondent and orders shall be passed in accordance with law after affording a reasonable opportunity of hearing to the petitioner. If the above deposit is not paid or the objections are not filed within the stipulated period, i.e., two weeks and four weeks from the date of receipt of a copy of this order respectively, the impugned order of assessment shall stand revived. 4/7 https://www.mhc.tn.gov.in/judis
Accordingly, the Writ Petition stands disposed of. There shall be no order as to costs. Consequently, connected miscellaneous petitions are closed.
2024 NCC : Yes / No Index : Yes / No Internet : Yes BTR To 1.The State Tax Officer / The Commercial Tax Officer, Adjudication-1, Intelligence, Office of the Joint Commissioner (State Tax) (Intelligence), Commercial Taxes Building, Dr.Thangaraj Salai, K.K.Nagar, Madurai-625 020. 2.The State Tax Officer-3/ The Commercial Tax Officer (Intelligence), Date Analytics, Office of the Joint Commissioner (State Tax) (Intelligence), Commercial Taxes Building, Dr.Thangaraj Salai, K.K.Nagar, Madurai-625 020. 5/7 https://www.mhc.tn.gov.in/judis
The Assistant Commissioner (ST), Madurai Rural (East), Commercial Taxes Building, Dr.Thangaraj Salai, K.K.Nagar, Madurai-625 020. 6/7 https://www.mhc.tn.gov.in/judis MOHAMMED SHAFFIQ
, J.
BTR
2024
7/7 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.