M/S.Madura Papers vs. The State Tax Officer

Facts

The petitioner, M/s. Madura Papers, filed a writ petition challenging an order dated 29.12.2023 passed by the State Tax Officer, Madurai, for the assessment year 2017-2018. The petitioner contended that neither the show cause notice nor the impugned order was served personally, but rather uploaded to the GST common portal, which they were unable to access. This prevented them from participating in the adjudication proceedings. The core issue revolved around an alleged mismatch between GSTR-2A and GSTR-3B. The petitioner claimed that if given an opportunity, they could explain these discrepancies, attributing initial non-response to technical glitches in the GST portal and the learning curve for e-mechanisms. They offered to pay 25% of the disputed tax to secure a final opportunity to present their case.

Held

The Court held that the impugned order dated 29.12.2023 is set aside. The petitioner is directed to deposit 25% of the disputed tax within two weeks of receiving a copy of the order. Upon compliance, the impugned order of assessment will be treated as a show cause notice, and the petitioner must submit their objections with supporting documents within four weeks of receiving a copy of the order. The respondent will consider these objections and pass a fresh order in accordance with the law after providing a reasonable opportunity of hearing to the petitioner. The Court also stipulated that if the deposit or objections are not filed within the stipulated periods, the impugned order of assessment shall stand revived. The Court's reasoning was based on the petitioner's plea for an opportunity to explain the discrepancies and the respondent's lack of serious objection to granting such an opportunity, especially considering the petitioner's willingness to deposit a portion of the disputed tax. The ratio decidendi is that principles of natural justice require proper notice and an opportunity to be heard, and in cases of genuine procedural lapses or technical difficulties, courts may grant a final opportunity to rectify the situation, often with a condition of partial pre-deposit.

Key Issues

1. Whether the impugned order dated 29.12.2023, passed by the State Tax Officer, is liable to be quashed for alleged non-service of proper notices and violation of principles of natural justice, particularly concerning the petitioner's inability to access the GST portal and participate in proceedings related to alleged discrepancies between GSTR-2A and GSTR-3B for the assessment year 2017-2018? Petitioner's Arguments: The petitioner argued that the impugned order is illegal and violates principles of natural justice because neither the show cause notice nor the final order was properly served. They were unable to access the GST portal, thus preventing them from participating in the adjudication process. They also stated that they could explain the alleged mismatch between GSTR-2A and GSTR-3B if given an opportunity. They relied on the judgment in M/s.K.Balakrishnan, Balu Cables vs. O/o. the Assistant Commissioner of GST & Central Excise in W.P.(MD)No.11924 of 2024. They further submitted that technical glitches and the adaptation period to the GST e-mechanism contributed to their inability to respond. Respondent's Arguments: The learned Government Advocate appearing for the respondent did not have serious objection to the petitioner being granted a final opportunity, subject to certain conditions.