Tvl. Swasthika Textiles vs. The State Tax Officer (St)

Facts

The petitioner, Tvl.Swasthika Textiles, represented by its Partner P.Jayakumar, filed a writ petition challenging an assessment order dated 22.01.2024 passed by the respondent, The State Tax Officer (ST), Tuticorin – 3, for the assessment year 2018-2019. The petitioner contended that neither the show cause notice nor the assessment order was served personally, but only uploaded to the GSTIN portal, which they were unable to access. This prevented them from participating in the adjudication proceedings. The core of the dispute involved an alleged mismatch between GSTR-2A and GSTR-3B. The petitioner claimed that technical glitches in the GST portal and their adaptation to the e-mechanism caused their inability to respond. They expressed willingness to pay 25% of the disputed tax and sought a final opportunity to present their objections.

Held

The Court held that the impugned assessment order dated 22.01.2024 is set aside. The reasoning was based on the petitioner's submission that they were unable to access the GSTIN portal and thus could not participate in the adjudication proceedings, leading to a violation of natural justice. The Court acknowledged the petitioner's willingness to deposit 25% of the disputed tax and their request for a final opportunity to present objections. The Court found merit in the petitioner's plea, especially considering the challenges faced with the GST portal and the adaptation period for assessees. The ratio decidendi is that where an assessee demonstrates a genuine inability to participate in proceedings due to technical issues with the portal and a violation of natural justice, and is willing to comply with certain conditions, a fresh opportunity should be granted. The operative direction is that the petitioner must deposit 25% of the disputed tax within two weeks of receiving the order. Upon compliance, the impugned order will be treated as a show cause notice, and the petitioner must submit objections within four weeks. The respondent will then consider these objections and pass orders after affording a hearing. Failure to comply with the deposit or objection filing timelines will result in the revival of the impugned assessment order. No issue was expressly left undecided.

Key Issues

1. Whether the assessment order dated 22.01.2024, passed by the respondent for the assessment year 2018-2019, is liable to be quashed as illegal and devoid of merits due to non-service of notices and inability of the petitioner to access the GSTIN portal, thereby violating principles of natural justice, as argued by the petitioner? The petitioner argued that the assessment order should be quashed because the show cause notices and the final order were not properly served, being only uploaded to the GSTIN portal, which they could not access. They contended that this prevented them from participating in the proceedings and presenting their case, particularly regarding the alleged mismatch between GSTR-2A and GSTR-3B. They relied on the judgment in M/s.K.Balakrishnan, Balu Cables vs. O/o. the Assistant Commissioner of GST & Central Excise. They also cited technical glitches and the learning curve associated with the new GST system as reasons for their non-response. The respondent, through the Additional Government Pleader, did not raise serious objections to the petitioner's request for a fresh opportunity.