Tvl.Sree Balaji General Timber vs. The State Tax Officer
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The petitioner, Tvl.Sree Balaji General Timber, represented by its Proprietor B.Veerapan, filed a writ petition challenging an assessment order dated 14.02.2024, passed by the respondent, The State Tax Officer, for the assessment year 2019-20. This order was preceded by notices in GST DRC 01A dated 21.04.2023 and GST DRC 01 dated 03.07.2023, along with personal hearing notices, to which the petitioner did not respond. The petitioner's filed returns indicated a turnover mismatch between GSTR-7 and GSTR-3B of -147809.00. However, the notices mentioned a GSTR-7 turnover of Rs. 5,17,72,794/-. The petitioner sought an opportunity to reply.
Held
The Court allowed the writ petition, setting aside the impugned assessment order and remitting the case back to the respondent for a fresh assessment. The Court reasoned that the petitioner deserved a fresh chance to explain their case, particularly in light of the discrepancy in the turnover figures presented in the pre-assessment notices. The respondent was directed to pass a fresh order on merits and in accordance with law. As a condition for this opportunity, the petitioner was required to deposit 5% of the disputed tax to the credit of the Department from its Electronic Cash Register within four weeks. The petitioner was also directed to file a reply to the show cause notices, with the impugned order treated as an addendum to the earlier notices. The petitioner would be heard before any fresh orders are passed.
Key Issues
1. Whether the petitioner is entitled to an opportunity to respond to the notices issued by the respondent, despite failing to do so previously, given the discrepancy in the turnover figures presented in the notices compared to the petitioner's filed returns? Petitioner's contention: The petitioner argued that there was a significant discrepancy in the turnover figure mentioned in the GST DRC 01A and GST DRC 01 notices (Rs. 5,17,72,794/-) compared to their filed returns (GSTR-7 turnover of Rs. 71,15,727.00 and GSTR-3B taxable turnover of Rs. 72,63,536.00). Due to this discrepancy, the petitioner requested one opportunity to submit a reply so that a correct assessment order could be made. Respondent's contention: The respondent contended that the writ petition was devoid of merit because the petitioner had voluntarily failed to respond to the notices preceding the impugned order. Therefore, the petitioner should have filed a statutory appeal under Section 107 of the respective GST enactment, 2017.
Sections Cited
Section 74, Section 107
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Before: and
In this writ petition, the petitioner has challenged the impugned assessment order passed under Section 74 of the respective GST enactments by the respondent dated 14.02.2024 for the assessment year 2019-20. 2.The impugned order has preceded the notices in GST DRC 01A dated 21.04.2023, the notice in GST DRC 01 dated 03.07.2023 and 3 personal hearing notices. To none of the notices, the petitioner has responded. 3.Prior to the above notices, the return filed by the petitioner was also analyzed and it is the case of the petitioner that the estimated turn over based on the GSTR 07 and the taxable turn over as per GSTR 3B are as under: PARTICULARS TURN OVER ESTIMATED TURNOVER BASED ON GSTR7 7115727.00 TAXABLE TURNOVER AS PER GSTR3B 7263536.00 TURNOVER MISMATCH (GSTR7-GSTR3B) -147809.00 GSTR7 TURNOVER 7115727.00 GSTR1 TURNOVER TURNOVER MISMATCH (GSTR7-GSTR-1 7115727.00 2/5 https://www.mhc.tn.gov.in/judis
However, in the notices that preceded the impugned order in GST DRC 01A and GST DRC 01, curiously Rs.5,17,72,794/- has been stated in the GSTR 7. Hence, the learned counsel for the petitioner submits that the petitioner may be given one opportunity to reply back, so that correct assessment order can be made by the respondent. 5.The learned Government Advocate for the respondent, on the other hand, would submit that the writ petition is devoid of merits, as the petitioner has voluntarily failed to respond to the notices that preceded the impugned order and thus, has suffered the impugned order and should therefore file a statutory appeal under Section 107 of the respective GST enactment, 2017. 6.Having considered the submissions made by the learned counsel for the petitioner and the learned Government Advocate for the respondent, I am inclined to conclude that the petitioner deserves a fresh chance to explain the case. 7.Considering the same, the impugned order is set aside and the case is remitted back to the respondent to pass a fresh order on merits and in accordance 3/5 https://www.mhc.tn.gov.in/judis with law subject to the petitioner depositing 5% of the disputed tax to the credit of the Department from its Electronic Cash Register within a period of 4 weeks from the date of receipt of a copy of this order. 8.Along with pre-deposit, the petitioner shall file a reply to the show cause notice issued to the petitioner earlier. The impugned order, which stands quashed, shall be treated as addendum to the show cause notice in GST DRC 01A and GST DRC 01 and the personal hearing notices. The petitioner shall also be heard before fresh orders are passed. 9.Accordingly, the Writ Petition stands allowed. No costs. Consequently, connected Miscellaneous Petitions are closed. Index : Yes / No 08.07.2024 Internet : Yes / No mm To The State Tax Officer, O/o. the Commercial Tax Officer, Karur – 1, Circle, Karur, Erode, Tamilnadu. 4/5 https://www.mhc.tn.gov.in/judis C.SARAVANAN, J.
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2024 5/5 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.