Tvl. V. Kannan vs. The Assistant Commissioner (St) (Fac)

Facts

The petitioner, Tvl.V.Kannan, filed a writ petition challenging an assessment order dated 10.06.2023 for the tax period 2019-20, passed by the Assistant Commissioner (ST) (FAC), Chokkikulam Circle, Madurai. The petitioner contended that neither the show cause notice nor the assessment order was served personally or by registered post, but were only uploaded to the GST portal. The petitioner claimed inability to access the portal and participate in the proceedings. The core of the dispute involved alleged mismatches between GSTR-07 vs GSTR-01 and GSTR-2A vs GSTR-3B. The petitioner stated that technical glitches on the GST portal and the learning curve for assessees adapting to the e-mechanism contributed to their inability to respond. The petitioner expressed willingness to deposit 10% of the disputed tax and sought a final opportunity to present their objections.

Held

The Court held that the impugned assessment order dated 10.06.2023 is set aside. The reasoning was based on the petitioner's submission that the notices and the order were not properly served, leading to a lack of opportunity to be heard and present their case. The Court acknowledged the petitioner's claim of technical difficulties with the GST portal and the initial learning curve for assessees. The Court also noted the petitioner's willingness to deposit 10% of the disputed tax. The ratio decidendi is that principles of natural justice, including proper service of notices and an opportunity to be heard, are paramount in tax proceedings. The Court directed the petitioner to deposit 10% of the disputed tax within two weeks of receiving the order. Upon compliance, the impugned order would be treated as a show cause notice, and the petitioner would have four weeks to submit objections with supporting documents. The respondent is then to consider these objections, provide a hearing, and pass a fresh order. If the deposit or objections are not filed within the stipulated times, the original assessment order will stand revived. The Court expressly left undecided any specific findings on the alleged mismatches between the GSTR filings.

Key Issues

1. Whether the assessment order dated 10.06.2023, passed by the respondent for the tax period 2019-20, is liable to be quashed on the grounds of non-service of show cause notice and the final assessment order on the petitioner, thereby violating principles of natural justice? Petitioner's arguments: The petitioner argued that the assessment order is illegal and devoid of merits because the statutory notices and the final order were not served through conventional means like tender or RPAD, but only uploaded to the GST portal. They further contended that they were unable to access the portal, preventing them from participating in the adjudication proceedings and explaining the alleged discrepancies between GSTR-07 vs GSTR-01 and GSTR-2A vs GSTR-3B. They relied on the judgment in Sree Manoj International Vs. Deputy State Tax Officer. The petitioner also cited technical glitches and the initial adaptation period to the GST e-mechanism as reasons for their failure to respond. Respondent's arguments: The learned Government Advocate for the respondent did not raise any serious objection to the petitioner's request for a final opportunity, subject to certain conditions.