M/S.Chendur Pandi Engineering Works vs. Commercial Tax Officer (State)
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The petitioner, M/s.Chendur Pandi Engineering Works, filed a writ petition challenging an order dated 07.07.2023 passed by the Commercial Tax Officer (State), Tuticorin-II Assessment Circle. This order determined a tax liability of Rs.6,79,673/- for the tax period September 2022, arising from a discrepancy between GSTR-7 and GSTR-3B returns. The petitioner contended that the entire tax amount had already been remitted in December 2022, and that Rs.2,64,000/- had been recovered through garnishee proceedings, which was in excess of the determined liability. The respondent, however, argued that only Rs.2,64,000/- had been recovered and the remaining amount was still due. The petitioner also cited technical glitches in the GST portal and difficulty in adapting to the e-mechanism as reasons for not responding to notices.
Held
The Court set aside the impugned order of assessment dated 07.07.2023. The Court directed that the impugned order be treated as a show cause notice. The petitioner was granted two weeks from the date of receipt of the order to submit their objections along with supporting documents. The respondent was directed to consider these objections and pass fresh orders in accordance with law after affording a reasonable opportunity of hearing to the petitioner. Recovery proceedings were ordered to be kept in abeyance until the fresh assessment order is passed. If objections were not filed within the stipulated period, the original impugned order of assessment would stand restored. The Court acknowledged the petitioner's submission regarding technical glitches and the need for an opportunity to present their case, to which the respondent did not have serious objection.
Key Issues
1. Whether the impugned order of assessment dated 07.07.2023, which determined a tax liability of Rs.6,79,673/- for September 2022, is illegal and liable to be quashed, considering the petitioner's claim of having already remitted the tax and the recovery of Rs.2,64,000/-. Petitioner's Arguments: The petitioner argued that the entire tax liability had been discharged in December 2022, and the recovery of Rs.2,64,000/- exceeded the determined tax demand. They also cited technical issues with the GST portal and the e-mechanism as reasons for their inability to respond to show cause notices and the adjudication order. They relied on the judgment in M/s.K.Balakrishnan, Balu Cables vs. O/o. the Assistant Commissioner of GST & Central Excise. The petitioner sought an opportunity to present their objections. Respondent's Arguments: The respondent contended that only Rs.2,64,000/- out of the total tax liability of Rs.6,79,673/- had been recovered, and the remaining amount remained unpaid. The respondent did not raise serious objections to granting the petitioner an opportunity to present their reply.
Sections Cited
GSTR-7, GSTR-3B
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Before: and
The present Writ Petition is filed challenging the impugned order of assessment dated 07.07.2023, whereby, the tax liability of Rs.6,79,673/- was arrived at on the basis of discrepancy between GSTR-7 and GSTR-3B for the period September 2022. 2. It is submitted by the learned counsel for the petitioner that the above sum has been remitted by the petitioner as early as in December 2022 and thus, no further tax is due. It is further submitted that despite the fact that the entire tax has already been discharged, recovery proceedings have been initiated and as a matter of fact, a sum of Rs.2,64,000/- has been recovered, which is in excess of the tax liability arrived in the impugned order dated 07.07.2023. 3. To the contrary, it is submitted by the learned Additional Government Pleader for the respondent that the only sum recovered from the petitioner out of the total tax liability of Rs.6,79,673/- is Rs.2,64,000/- and the remaining sum is unpaid.
It is submitted by the learned counsel for the petitioner that recovery proceedings have been initiated by way of garnishee proceedings and garnishee 2/6 https://www.mhc.tn.gov.in/judis notice was issued to the petitioner's principal vendor, which is not enclosed in the typed set of papers as the same was not served on the petitioner, but was informed orally.
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. 6. It was 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 show cause notices and the order of adjudication. It was further submitted that the petitioner is aggrieved by the impugned order as they were unable to put forth their objections in view of the fact that they were unaware of the notices being uploaded in the GSTIN portal. It was submitted that out of the total demand of Rs.6,79,673/-, a sum of Rs.2,64,000/- has already been recovered, which works out to more than 25% and would thus request that the petitioner may be granted an opportunity before the adjudicating authority to put forth their objections to 3/6 https://www.mhc.tn.gov.in/judis the proposal, to which, the learned Additional Government Pleader for the respondent does not have any serious objection.
The learned Additional Government Pleader would submit that the petitioner may submit its reply, which would be considered and assessment would be redone by taking into account the sums that have been deposited/remitted by way of tax. He would further submit that the recovery proceedings would be kept in abeyance until the assessment is made afresh.
Recording the same, the impugned order passed by the respondent dated 07.07.2023 is set aside. The impugned order of assessment shall be treated as show cause notice and the petitioner shall submit its objections within a period of two (2) weeks from the date of receipt of a copy of this order along with supporting documents/material. 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. Recovery proceedings shall be kept in abeyance until the assessment order is passed. If objections are not filed within the stipulated period, i.e., two weeks from the date of receipt of a copy of this order, the impugned order of assessment shall stand restored. 4/6 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. 26.09.2024 Index : Yes / No Internet : Yes/ No Lm To The Commercial Tax Officer (State), Tuticorin-II Assessment Circle, No.6 R, North Cotton Road, Thoothukudi, Tamil Nadu – 628 001. 5/6 https://www.mhc.tn.gov.in/judis MOHAMMED SHAFFIQ
, J.
Lm
2024 6/6 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.