Tvl P Karuppaiah vs. The State Tax Officer

Facts

The petitioner, P. Karuppaiah, filed a writ petition challenging an assessment order dated July 18, 2023, passed by the State Tax Officer, Pudukottai-II Circle, for the tax period 2020-21. The petitioner contended that neither the show cause notice nor the assessment order was served personally, but rather uploaded to the GSTIN portal. The petitioner's accountant failed to inform them, and the petitioner was unable to access the portal to participate in the proceedings. The core of the dispute involved an alleged mismatch between GSTR-3B and GSTR-7 returns. The petitioner claimed that given an opportunity, they could explain these discrepancies, citing technical glitches and adaptation challenges with the GST portal. The petitioner also offered to pay 25% of the disputed tax to secure a fresh opportunity.

Held

The Court held that the impugned assessment order dated July 18, 2023, for the tax period 2020-21, was to be set aside. The Court reasoned that the petitioner was not afforded a proper opportunity to present their case due to the alleged non-service of notices and the assessment order, and their inability to access the GSTIN portal. This failure to provide a reasonable opportunity of hearing violated principles of natural justice. The Court directed the petitioner to deposit 25% of the disputed tax within two weeks of receiving the order. Upon compliance, the impugned order would be treated as a show cause notice, and the petitioner would have four weeks to submit their objections with supporting documents. The respondent was then to consider these objections, provide a hearing, and pass a fresh order in accordance with law. The Court stipulated that if the deposit or objections were not filed within the stipulated timelines, the original assessment order would stand revived. No issue was expressly left undecided.

Key Issues

1. Whether the assessment order dated July 18, 2023, passed by the respondent for the tax period 2020-21 is liable to be quashed on the grounds of non-service of notices and the assessment order, and the petitioner's inability to access the GSTIN portal to participate in the adjudication proceedings, thereby violating principles of natural justice? Petitioner's arguments: The petitioner argued that the assessment order is illegal and devoid of merits due to the lack of proper service of the show cause notice and the final assessment order. They contended that the uploading of these documents on the GSTIN portal, without personal intimation and coupled with their inability to access the portal, prevented them from presenting their case and explaining the alleged discrepancies between GSTR-3B and GSTR-7. They relied on the judgment in M/s.K.Balakrishnan, Balu Cables vs. O/o. the Assistant Commissioner of GST & Central Excise. The petitioner also highlighted technical glitches and adaptation challenges with the GST portal as reasons for their non-response and expressed willingness to deposit 25% of the disputed tax for a fresh opportunity. Respondent's arguments: The respondent, represented by the Additional Government Pleader, did not raise any serious objection to the petitioner's request for a fresh opportunity, subject to certain conditions.