Tvl. S. Kumaresan Contractor vs. The Assistant Commissioner (St)

Facts

The petitioner, Tvl.S.Kumaresan Contractor, engaged in works contract and registered under the Tamil Nadu Goods and Service Tax Act, 2017, filed a writ petition challenging an assessment order dated 10.06.2023, passed by the Assistant Commissioner (ST), Tuticorin. The assessment pertains to the tax period 2019-20. The dispute arose from alleged discrepancies between the petitioner's GSTR-3B and GSTR-7 returns. The petitioner claimed inability to participate in the adjudication proceedings due to technical glitches on the GSTIN portal. Notices in DRC-01-A and DRC-01 were issued, and personal hearings were scheduled on 28.04.2023, 04.05.2023, and 15.04.2023. The petitioner expressed willingness to pay 25% of the disputed tax and sought a final opportunity to present their case.

Held

The Court held that the impugned assessment order dated 10.06.2023 should be set aside to provide the petitioner with a reasonable opportunity to present their case. The Court acknowledged the petitioner's submission regarding technical glitches on the GST portal and the challenges faced by assessees in adapting to the GST regime. The reasoning was that a fair hearing is a fundamental principle of natural justice, and the petitioner's inability to participate due to portal issues warranted a reconsideration. The ratio decidendi is that where an assessee demonstrates a plausible reason for non-participation in assessment proceedings, such as technical difficulties with the GST portal, and offers to comply with certain conditions, the assessment order may be set aside to allow for a proper adjudication. The Court directed the petitioner to deposit 25% 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. The respondent was directed to consider these objections and pass a fresh order after affording a reasonable opportunity of hearing. The Court also stipulated that if the deposit or objections were not filed within the stipulated periods, the original assessment order would stand revived.

Key Issues

1. Whether the assessment order dated 10.06.2023, passed by the respondent authority, is liable to be quashed on the grounds of procedural irregularities and lack of opportunity for the petitioner to present their case, as contemplated under the relevant provisions of the GST Act and Rules? The petitioner argued that technical glitches on the GSTIN portal prevented them from accessing it and participating in the adjudication proceedings. They contended that these technical issues, coupled with the learning curve for assessees adapting to the GST mechanism, led to their inability to respond to notices and the final order. The petitioner relied on a recent judgment of the High Court in M/s.K.Balakrishnan, Balu Cables vs. O/o. the Assistant Commissioner of GST & Central Excise. They also offered to deposit 25% of the disputed tax to secure a final opportunity to explain the discrepancies between GSTR-3B and GSTR-7. The respondent, represented by the Additional Government Pleader, did not raise any serious objection to granting a final opportunity.