M/S.Home Style Merchandise PVT. LTD. vs. Office Of The Superintendent Of Central GST And Central Excise Karur - Ii Range

Facts

The petitioner, M/s. Home Style Merchandise Pvt. Ltd., filed a writ petition challenging an order dated 28.12.2023 passed by the Superintendent of Central GST and Central Excise. The petitioner, engaged in exporting handloom and powerloom products, contended that neither the show cause notice nor the impugned assessment order was served upon them. They also claimed inability to access the GSTIN portal, preventing participation in adjudication proceedings. The assessment order rejected claims for Input Tax Credit (ITC) on grounds including non-payment of GST under RCM on freight, ineligible ITC on free samples, non/short payment of GST under RCM on services from unregistered persons, non-reversal of ITC on common credit, GSTR-3B and GSTR-2A mismatch, and discrepancies in zero-rated clearances. The petitioner expressed readiness to explain these discrepancies if given an opportunity and offered to deposit 25% of the disputed tax.

Held

The Court held that the impugned order of assessment should be treated as a show cause notice, and the petitioner should be granted an opportunity to submit their objections. The reasoning was based on the petitioner's submission that they were unable to participate in the adjudication proceedings due to non-service of notices and technical issues with the GST portal. The Court acknowledged the petitioner's readiness to explain the discrepancies and their willingness to deposit 25% of the disputed tax. The ratio decidendi is that where an assessee demonstrates a lack of opportunity to present their case due to procedural infirmities or technical issues, and shows a willingness to comply with financial conditions, a final opportunity for adjudication should be granted to uphold principles of natural justice. The Court directed the petitioner to deposit 25% of the disputed tax within two weeks and submit objections with supporting documents within four weeks. The respondent is to consider these objections and pass orders after affording a hearing. The impugned order of assessment would stand revived if the deposit or objections are not filed within the stipulated time. No issue was expressly left undecided.

Key Issues

1. Whether the impugned order dated 28.12.2023, passed by the Superintendent of Central GST and Central Excise, is liable to be quashed on the grounds of non-service of show cause notice and assessment order upon the petitioner, and the petitioner's inability to access the GSTIN portal, thereby violating principles of natural justice? Petitioner's arguments: The petitioner argued that the assessment order was passed without proper service of notices, rendering it void. They further contended that technical glitches on the GST portal and the initial learning curve for e-mechanisms prevented them from responding to notices and participating in proceedings. They relied on the judgment in M/s. K. Balakrishnan, Balu Cables vs. O/o. the Assistant Commissioner of GST & Central Excise (W.P.(MD)No.11924 of 2024 dated 10.06.2024). The petitioner also expressed willingness to deposit 25% of the disputed tax to secure an opportunity to present their case. Respondent's arguments: The learned Additional Government Pleader appearing for the respondent did not raise any serious objection to the petitioner's request for a final opportunity, subject to compliance with certain conditions.