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

Facts

The petitioner, TVL Integrated Technologies, filed a writ petition challenging an order passed by the State Tax Officer (1st respondent) dated 14.08.2023 and a consequential recovery notice issued by the Assistant Commissioner(ST)(FAC) (2nd respondent) dated 01.02.2024. The petitioner contended that neither the show cause notices nor the impugned assessment order were served upon them, and the same were only uploaded to the GST portal. The petitioner claimed inability to access the portal and participate in the adjudication proceedings. The dispute pertains to an alleged mismatch between GSTR-3B and GSTR-1 returns for the period 2019-2020. The petitioner expressed readiness to deposit 25% of the disputed tax and sought a final opportunity to present their objections.

Held

The Court held that the impugned order and the consequential recovery notice are set aside. The reasoning was based on the petitioner's submission that they were not properly served with the show cause notices and the assessment order, and that they were unable to access the GST portal to participate in the proceedings. The Court acknowledged the petitioner's willingness to deposit 25% of the disputed tax and to submit their objections. The Court's decision was influenced by the principle of affording a reasonable opportunity of hearing to the assessee, especially in light of alleged technical issues with the GST portal. The ratio decidendi is that where an assessee demonstrates non-receipt of statutory notices and inability to access the portal, and is willing to comply with pre-conditions, a final opportunity to present their case should be granted to uphold principles of natural justice. The operative direction is to treat the impugned assessment order as a show cause notice, requiring the petitioner to deposit 25% of the disputed tax within two weeks and submit objections within four weeks. The respondents are directed to consider these objections and pass orders after a hearing. The impugned proceedings will stand revived if the deposit or objections are not filed within the stipulated periods.

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 notices and the assessment order on the petitioner, thereby violating principles of natural justice? (Question of law) Petitioner's arguments: The petitioner argued that the impugned order and recovery notice are invalid because they were not served personally or through other effective means, but only uploaded to the GST portal, which they could not access. They emphasized that this prevented them from participating in the adjudication process. 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) to support their claim for an opportunity to be heard. They also cited technical glitches in the GST portal and the learning curve for assessees as reasons for their inability to respond. Revenue's arguments: The learned Additional Government Pleader appearing for the respondents did not raise any serious objection to the petitioner's request for a final opportunity to present their case, subject to certain conditions.