Tvl. Ma Infrastructures vs. The State Tax Officer

Facts

The petitioner, Tvl.MA Infrastructures, filed a writ petition challenging an order in Form GST DRC-07 dated July 7, 2023, for the assessment year 2020-2021, issued by the respondent, the State Tax Officer. The petitioner, engaged in works contract, contended that neither the show cause notice nor the impugned order was served on them, but rather uploaded to the GST portal under "Additional notices and orders." The petitioner claimed they were unable to access the portal and participate in the adjudication. The core issue involved an alleged mismatch between GSTR-3B and GSTR-2A. The petitioner stated they could explain these discrepancies if given an opportunity and cited technical glitches and adaptation to the e-mechanism as reasons for non-response. They offered to pay 25% of the disputed tax and requested a final opportunity to present their objections.

Held

The Court held that the petitioner should be granted an opportunity to present their case. The impugned order of assessment was treated as a show cause notice. The petitioner was directed to deposit 25% of the disputed tax within two weeks of receiving the order. Upon compliance, the petitioner was to submit their objections along with supporting documents within four weeks. The respondent was then to consider these objections and pass orders in accordance with law after affording a reasonable opportunity of hearing to the petitioner. The Court reasoned that this approach would balance the revenue's interest with the petitioner's right to be heard, especially given the petitioner's submission regarding technical issues and their willingness to pay a portion of the disputed tax. The ratio decidendi is that where there is a plausible explanation for non-compliance due to portal issues and a willingness to deposit a portion of the tax, a reasonable opportunity of hearing should be granted. If the deposit or objections are not filed within the stipulated time, the impugned order would stand revived.

Key Issues

1. Whether the impugned order dated 07.07.2023, issued by the respondent, is liable to be quashed on the grounds of non-service of notice and inability of the petitioner to access the GST portal, thereby violating principles of natural justice? Petitioner's arguments: The petitioner argued that the non-service of the show cause notice and the final order, with their upload only on the GST portal under "Additional notices and orders," constituted a violation of natural justice. They further contended that technical glitches in the GST portal and their initial difficulty in adapting to the e-mechanism prevented them from accessing the notices and participating in the 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) for support. Respondent's arguments: The learned Additional Government Pleader appearing for the respondent did not have any serious objection to the petitioner's request for an opportunity to present their case, provided certain conditions were met.