M/S Master Sugricals And Pharmaceuticals vs. The Commercial Tax Officer (Audit) 3.2

Facts

The petitioner, M/s. Master Surgicals and Pharmaceuticals, represented by its partner, filed a writ petition challenging adjudication orders passed by the Commercial Tax Officer (Audit) 3.2 for the financial years 2021-22 and 2022-23. The petitioner contended that the partner faced severe personal circumstances due to his twin daughters' medical emergency, leading to the death of one daughter. This resulted in significant mental trauma and distress, preventing him from attending to official correspondence and submitting replies to notices within the prescribed time. The petitioner argued that their non-participation was due to these unavoidable circumstances. The adjudication proceedings were initiated based on an alleged mismatch between GSTR-1 and GSTR-3B forms. A sum of Rs. 3,58,123/- was recovered from the petitioner's account.

Held

The Court allowed the petition in part. It found bona fides in the reasons assigned by the petitioner for their non-participation in the adjudication proceedings, acknowledging the severe personal circumstances involving the health and death of the partner's daughter. The Court was of the opinion that the petitioner should be granted an opportunity to show cause against the adjudication, which was based on an alleged mismatch between Forms GSTR-1 and GSTR-3B. The Court reasoned that if the petitioner could produce documents to justify their declarations and demonstrate the genuineness of transactions, a comprehensive adjudication would be possible. Consequently, the adjudication orders and the summary thereof, along with a recovery notice, were quashed. The petitioner was granted liberty to file their response to the show cause notices by 15.10.2025.

Key Issues

1. Whether the Court must interfere to restore the proceedings and grant the petitioner an opportunity to file a response to the show cause notices dated 28.05.2025 and 15.07.2023, considering the petitioner's plea of unavoidable personal circumstances. The petitioner argued that the non-participation in the adjudication proceedings was not deliberate but solely attributable to extraordinary and unavoidable circumstances beyond their control, specifically the severe medical emergency and subsequent death of the partner's daughter, which caused significant mental trauma. The petitioner also stated that they had filed a response to the initial intimation for the tax period 2021-22 and could produce documents to justify their declarations in Form GSTR-3B and demonstrate the genuineness of transactions. The revenue, represented by the learned Additional Government Advocate, questioned whether the Court should intervene to restore the proceedings and allow the petitioner to file their response.