Tvl Integrated Technologies vs. The State Tax Officer Cum Commercial Tax Officer

Facts

The petitioner, Tvl. Integrated Technologies, filed a writ petition challenging an order passed by the first respondent (State Tax Officer) on August 14, 2023, under Section 73 of the CGST Act, and a consequential recovery notice issued by the second respondent (Assistant Commissioner) dated February 1, 2024. The petitioner contended that neither the show cause notice nor the assessment order was served, and it was only uploaded to the GST portal, which the petitioner was unable to access. This prevented the petitioner from participating in the adjudication proceedings. The core of the dispute involved alleged mismatches between GSTR-3B and GSTR-1, and GSTR-3B and GSTR-7 for the period 2018-2019. 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 and consequential recovery notice should be set aside. The reasoning was based on the petitioner's submission that they were unable to access the GST portal and thus could not participate in the adjudication proceedings, leading to a violation of natural justice. The Court acknowledged the petitioner's readiness to explain the alleged discrepancies and their willingness to deposit 25% of the disputed tax. The Court directed the petitioner to deposit 25% of the disputed tax within two weeks of receiving the order. Upon compliance, the impugned assessment order would be treated as a show cause notice, and the petitioner would have four weeks to submit objections. The respondents were directed to consider these objections and pass orders after affording a reasonable opportunity of hearing. The ratio decidendi is that if an assessee is prevented from participating in proceedings due to technical issues with the GST portal and demonstrates a willingness to comply with certain conditions, a final opportunity to present their case should be granted to uphold principles of natural justice. The Court expressly left undecided any substantive issues regarding the tax discrepancies themselves, as the matter was remanded for fresh consideration.

Key Issues

1. Whether the impugned order and consequential recovery notice are liable to be quashed on the grounds of non-service of show cause notice and assessment order on the petitioner, and the petitioner's inability to access the GST portal, thereby violating principles of natural justice under Article 226 of the Constitution of India? Petitioner's arguments: The petitioner argued that the impugned order and recovery notice should be quashed because they were not properly served. The petitioner claimed inability to access the GST portal, preventing participation in adjudication. They highlighted technical glitches with the GST portal and the learning curve for assessees. The petitioner relied on the judgment in M/s.K.Balakrishnan, Balu Cables vs. O/o. the Assistant Commissioner of GST & Central Excise. They offered to deposit 25% of the disputed tax and sought a final opportunity to present their objections. Respondents' arguments: The learned Additional Government Pleader for the respondents did not raise any serious objection to the petitioner's request for an opportunity to present their case, provided certain conditions were met.