Tvl.Chellam Mobiles vs. The Commissioner Of Commercial Taxes

Facts

The petitioner, Tvl. Chellam Mobiles, filed a writ petition challenging an assessment order dated December 27, 2022, passed by the Assistant Commissioner (ST). The petitioner had reported a total taxable turnover for the assessment year 2020-2021. The respondent issued intimations alleging a difference of Rs. 50 lakhs in exempted turnover reported between GSTR-3B and GSTR-1, and also demanded interest for belated filing of a return. The petitioner provided explanations and supporting documents, including details of sales under the 'exempted' category, specifically stating it was under 'Agriculture'. The respondent, however, did not consider the petitioner's reply and the accompanying evidence, proceeding to pass the impugned order. The petitioner contended that the respondent mechanically passed the order without properly dealing with the submitted explanation and evidence.

Held

The Court held that the respondent authority failed to consider the reply and the evidence submitted by the petitioner concerning the exempted turnover. The Court found that the respondent had extracted the petitioner's reply but did not deal with its content or refer to the accompanying documents, which specifically detailed sales under the 'Agriculture' exemption. The Court reasoned that the respondent should have either sought further clarification from the petitioner or directed them to submit additional evidence for the agricultural sales before passing the order. By mechanically passing the order without due consideration of the petitioner's explanation and evidence, the respondent acted improperly. Consequently, the Court quashed the impugned order and directed the respondent to reconsider the matter. The petitioner was granted liberty to submit further evidence, particularly breakup details for the agricultural exemption, and was directed to cooperate with the assessment without seeking further adjournments. The assessment was to be redone within four weeks.

Key Issues

1. Whether the respondent authority failed to consider the reply and evidence submitted by the petitioner regarding exempted turnover, thereby violating principles of natural justice? (Question of law and fact) The petitioner argued that they had submitted relevant records, specifically detailing Rs. 50 lakhs of sales under the 'Agriculture' exemption category. They contended that while the respondent extracted their reply in the impugned order, they failed to address the substance of the reply or refer to the documentary evidence filed alongside it. The petitioner asserted that the respondent should have sought further clarification or directed the submission of additional evidence before passing the order. The respondents did not record any specific arguments in the judgment.