M.S. Trading And Service vs. The Commissioner
Original PDF →Facts
The petitioner, M.S. Trading & Service, represented by its Proprietor, filed a writ petition challenging an order dated 25.04.2022 passed by the Assistant Commissioner (ST), Thanjavur-II Circle, for the assessment year 2018-2019. The impugned order disallowed Input Tax Credit (ITC) claimed in excess of what was auto-populated in GSTR 2A, construing it as tax collected but not paid by the supplier, and thus ineligible under Section 16(2)(c) of the TNGST Act, 2017. The petitioner had not responded to the ASMT-10 notice issued on 14.12.2021, nor availed the opportunities for personal hearing provided through DRC-01 notice dated 17.02.2022 and subsequent dates.
Held
The Court held that while the petitioner had not participated in the adjudication mechanism, in the interest of justice, the impugned order dated 25.04.2022 should be set aside. The matter was remitted back to the respondent to pass a fresh order on merits and in accordance with law within 60 days. The impugned order was to be treated as a corrigendum to the prior notices. The petitioner was directed to cooperate with the respondent and deposit 10% of the disputed tax amount along with a reply within 30 days. The respondent was given liberty to pass fresh orders on merits if the petitioner failed to deposit the specified amount. The Court did not expressly leave any issue undecided, but the primary decision was to allow a fresh opportunity to the petitioner.
Key Issues
1. Whether the impugned order dated 25.04.2022, passed by the Assistant Commissioner (ST), is illegal, arbitrary, without jurisdiction, and in violation of the principles of natural justice, warranting quashing and a fresh assessment order. The petitioner argued that the order was passed without affording a proper opportunity. The respondents contended that the petitioner failed to participate in the adjudication mechanism and did not avail the opportunities provided, and that the writ petition should be dismissed in light of the Supreme Court's decision in Assistant Commissioner (CT) LTU, Kakinada and others Vs. Glaxo Smith Kline Consumer Health Care Limited. The core issue revolves around the petitioner's non-participation in the assessment proceedings and the consequent validity of the order passed ex-parte.
Sections Cited
Section 16(2)(c), Section 73
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
order
in GSTIN _____________ Page No. 1 of 6 https://www.mhc.tn.gov.in/judis 33DNOPS6976RIZK/2018-19 dated 25.04.2022 passed by the 3rd respondent and quash the same as illegal arbitrary wholly without juri iction and in violation of principle of natural justice direct the 3rd respondent to pass assessment order afresh after affording an opportunity of the petitioner.
For Petitioner : No Appearance For Respondents : Mr.J.K.Jayaseelan. Govt.Advocate O R D E R Although there is no representation on behalf of the petitioner in this writ petition, it is noticed that petitioner has challenged the impugned order dated 25.04.2022 passed by the 3rd respondent herein for the assessment year 2018-2019. Operative portion of the impugned order reads as under: The claim of ITC in excess of what is auto populated in GSTR 2A is construed as tax collected but not paid by the supplier. Hence as per Sec.16(2)(c) of the TNGST Act 2017 the respective ITC is construed as ineligible since tax charged in respect of the supply has not actually been paid to the government.
In this regard, ASMT-10 notice issued on _____________ Page No. 2 of 6 https://www.mhc.tn.gov.in/judis
2021.Tax payer not replied. Then DRC-01 notice issued on 17.02.2022 and also personal hearing opportunity given on 07.03.2022,11.03.2022 and 18.03.2022. But the taxpayer did not avail those opportunity. Hence, you had nothing to say in this matter and it is construed that you had made a non- willful misstatement and proceedings DRC-07 is initiated hereby under Section 73 of the TNGST Act,2017.”
Reading of the above indicates that petitioner has not participated in the adjudication mechanism prescribed under the TNGST Act, 2017 and TNGST Rules,2017. The Writ Petition has been filed on 21.11.2022. Although learned counsel for the respondent would submit that Writ Petition has been dismissed in the light of the decision of the Hon'ble https://www.mhc.tn.gov.in/judis Petitioner shall also deposit 10% of the disputed tax amount along with a reply within a period of 30 days from the date of receipt of a copy of this order.
It is expected that respondent will issue a notice to the petitioner calling upon the petitioner to deposit 10% of the disputed tax as ordered by this Court today in this order in case if the petitioner fails to deposit the afore said amount respondents are at liberty to pass fresh orders on merits. Writ Petition is disposed of with the above observation. No costs. Consequently, connected miscellaneous petitions are closed. 16.04.2024. Index: Yes/ No Neutral Citation: Yes / No Speaking Order / Non-Speaking Order kpr _____________ Page No. 4 of 6 https://www.mhc.tn.gov.in/judis Copy To:
The Commissioner Commercial Taxes Ezhilagam Chepauk, Chennai-5 2.The Deputy Commissioner (ST) No.6-C, Old Post Office Road Trichy-620 001 3.The Assistant Commissioner (ST) Thanjavur-II Circle Thanjavur _____________ Page No. 5 of 6 https://www.mhc.tn.gov.in/judis C.SARAVANAN
, J.
kpr W.P.(MD)No.26384 of 2022 16.04.2024 _____________ Page No. 6 of 6 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.