Tvl Balaji Blue Metals vs. The Assistant Commissioner (St) (Fac)
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The petitioner, Tvl. Balaji Blue Metals, represented by its partner O. Arjunan, filed a writ petition challenging an assessment order dated 27.12.2023 passed by the Assistant Commissioner (ST)(FAC), Madurai Rural South Assessment Circle, for the assessment year 2017-18. This order was preceded by a notice in ASMT-10 dated 11.08.2023 and a notice in DRC-01 dated 27.09.2023. The petitioner had not replied to these notices. The petitioner's explanation was that they had purchased capital goods, availed credit, but failed to include the details in their GSTR-3B returns, leading to the perception of under-reported supplies. The petitioner sought an opportunity to explain the facts, stating no tax liability arose from the purchase of capital goods.
Held
The Court quashed the impugned assessment order dated 27.12.2023. The reasoning was based on the petitioner's submission that they were willing to deposit 10% of the disputed tax and sought an opportunity to explain the facts. The Court found merit in allowing the petitioner to present their case. The ratio decidendi is that procedural fairness requires an opportunity for the assessee to explain discrepancies, especially when a genuine explanation is offered and the assessee demonstrates willingness to comply with financial obligations. The Court directed that the quashed order be treated as an addendum to the preceding notice. The petitioner is to file a reply to the show cause notice within 30 days of receiving the order, after depositing 10% of the disputed tax. The respondent is then to pass a fresh order on merits and in accordance with law, preferably within three months thereafter.
Key Issues
1. Whether the petitioner should be granted an opportunity to explain the facts regarding the purchase of capital goods and the non-inclusion of details in GSTR-3B returns, especially when no tax liability is claimed to have arisen from such purchases. Petitioner's contention: The petitioner argued that they should be given one opportunity to explain the facts, asserting that the purchase of capital goods did not result in any tax liability. They sought to rectify the procedural lapse of not including the details in the returns. Respondent's contention: The respondent, represented by the Additional Government Pleader, did not explicitly record any argument against granting an opportunity. However, the impugned order was passed due to the petitioner's failure to reply to the show cause notices.
Sections Cited
Section 73, Section 129, Rule 86A
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Before: and
This Writ Petition is taken up for disposal at the time of admission itself, after hearing the learned counsel for the petitioner and the learned Additional Government Pleader for the respondent.
The petitioner is before this Court against the impugned order dated 27.12.2023 for the assessment year 2017-18. The impugned order has preceded the notice in ASMT-10 bearing reference No.ZD3308230597255 dated 11.08.2023 and notice in DRC-01 bearing reference No.AD330923090663V dated 27.09.2023. The petitioner has not replied to the same, which has now culminated in the impugned order. The explanation that is forthcoming before the Court during hearing is that the petitioner had purchased the capital goods, on which, the petitioner had availed, but, had not included the details in the returns filed in Form GSTR-3B. Hence, there is purported violation the filing returns and perceptions that the petitioner has under reported the supplies effected by the 2/5 https://www.mhc.tn.gov.in/judis petitioner.
The learned counsel for the petitioner further submits that the petitioner may be given one opportunity to explain the facts as there is no tax liability arising out of purchase of capital goods.
Having considered the submission of the learned counsel for the petitioner and the learned Additional Government Pleader for the respondent and recording the submission of the learned counsel for the petitioner that the petitioner is willing to deposit 10% of the disputed tax, the impugned order is quashed and the matter is remitted back to the respondent to pass fresh orders.
The impugned order, which stands quashed, shall be treated as addendum to the notice preceded to the impugned order. The petitioner shall file reply to the show cause notice by depositing 10% of the disputed tax within 30 days from the date of receipt of a copy of this order. The respondent shall pass fresh order on merits and in accordance with law, subject to the petitioner depositing 10% of the disputed tax, as expeditiously as possible preferably within 3/5 https://www.mhc.tn.gov.in/judis a period of three months thereafter. Accordingly, this Writ Petition is allowed. No costs. Consequently, connected miscellaneous petition is closed. Index : Yes / No 05.06.2024 Internet : Yes / No apd To The Assistant Commissioner (ST)(FAC), Madurai Rural South Assessment Circle, Madurai – 625 020. 4/5 https://www.mhc.tn.gov.in/judis C.SARAVANAN, J.
apd
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.