M/S. Sgs Traders vs. The Deputy State Tax Officer - 2
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The petitioner, M/s.SGS Traders, challenged an order dated 30.12.2023 passed by the Deputy State Tax Officer-2, Sivakasi. This order confirmed demands raised in a notice dated 20.09.2023, concerning input tax credit mismatch, reverse charge mechanism, tax on rebate, ITC reversal for non-payment beyond 180 days, and liability for advance for land. The petitioner contended that their records were seized by Central Tax Authorities, leading to an Order-in-Original dated 30.12.2022. They had obtained an interim stay on this order, which was later made absolute. Due to the absence of seized documents, the petitioner was unable to reply to the respondent's notice, and the respondent proceeded to pass the impugned order.
Held
The Court held that the impugned order dated 30.12.2023 was liable to be interfered with due to the manner in which it was passed. The Court found merit in the petitioner's submission that they were unable to reply to the notice dated 20.09.2023 in the absence of documents seized by the Central Tax Authorities. This prevented the petitioner from effectively presenting their case, thus violating the principles of natural justice. Consequently, the Court quashed the impugned order. The case was remitted back to the respondent to pass a fresh order on merits and in accordance with law within a period of nine months. The petitioner was advised to work out their remedy for retrieving the seized documents and was expected to liaise with the Central Tax Authorities to file a reply within three months from the date of the order.
Key Issues
1. Whether the impugned order dated 30.12.2023, passed by the respondent, is liable to be quashed for gross violation of the principles of natural justice? The petitioner argued that they were denied a fair hearing as their crucial records were seized by the Central Tax Authorities, preventing them from filing a proper reply to the show cause notice. They contended that the respondent proceeded to pass an order without considering their inability to access the necessary documents. The respondent, represented by the Additional Government Pleader, did not record any specific arguments against the petitioner's contention regarding the violation of natural justice, but implicitly supported the impugned order by its existence.
Sections Cited
GST DRC 01
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
O R D E R The petitioner, an assessee with the State Tax Authority under the provisions of the respective GST Enactments, is before this Court challenging the impugned order dated 30.12.2023 passed by the respondent.
By the impugned order dated 30.12.2023, the demands proposed in the Notice in Form GST DRC 01 dated 20.09.2023 have been confirmed under the following heads:- had seized all records and had passed Order-in-Original No.MDU-GST- ADC-17-2022 dated 30.12.2022, against which, the petitioner has filed W.P.(MD) No.8390 of 2023 and has obtained an interim stay on 17.04.2023 which stay has been made absolute on 02.08.2023. _____________ Page No. 2 of 5 https://www.mhc.tn.gov.in/judis
It is submitted that the petitioner was unable to reply to the notice dated 20.09.2023 in absence of the documents which were seized by the Central Tax Authorities. In the meantime, the respondent has proceeded to pass the impugned order.
Having considered the submissions made by the learned counsel for the petitioner and the learned Additional Government Pleader for the respondent, I am of the view that the impugned order in the manner in which it has been passed is liable to be interfered with.
Accordingly, the impugned order is quashed and the case is remitted back to the respondent to pass fresh order on merits and in accordance with law, within a period of 9 months from today.
It is open for the petitioner to work out the remedy for retrieving the documents required to file a reply. It is expected that the petitioner will liaise with the Central Tax Authorities to retrieve the seized documents, and file a reply within a period of 3 months from today. _____________ Page No. 3 of 5 https://www.mhc.tn.gov.in/judis
In the result, this Writ Petition stands disposed of. No costs. Consequently, connected Miscellaneous Petitions are closed. 16.07.2024 Index: Yes / No Neutral Citation: Yes / No Speaking Order / Non-Speaking Order JEN Copy To: The Deputy State Tax Officer-2, Sivakasi 3 Assessment Circle, Sivakasi. _____________ Page No. 4 of 5 https://www.mhc.tn.gov.in/judis C.SARAVANAN
, J.
JEN and W.M.P.(MD) Nos.6218 & 6219 of 2024 16.07.2024 _____________ Page No. 5 of 5 https://www.mhc.tn.gov.in/judis
Reproduced from the public record of the Madras High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.