M/S.Dharmarathina Textile Private Limited vs. The Assistant Commissioner (St) (Fac)

Facts

The petitioner, M/s. Dharmarathina Textile Private Limited, challenged an ex-parte assessment order dated August 23, 2024, passed by the Assistant Commissioner (ST) (FAC), Aruppukkottai, for the tax period 2019-2020. Initially, a show cause notice was issued on August 17, 2023, to which the petitioner replied on November 24, 2023. Subsequently, a second show cause notice was issued on May 20, 2024, followed by three reminder notices. The petitioner sought time to reply on July 12, 2024, after receiving the third reminder notice. However, this request was not granted, and the impugned ex-parte assessment order was passed. The petitioner offered to deposit 25% of the disputed amount if the order was set aside. The respondents' counsel conceded that no time was granted after the petitioner's request and suggested remanding the matter subject to the deposit.

Held

The Court held that the impugned assessment order dated August 23, 2024, passed by the first respondent is liable to be set aside. The Court reasoned that when the petitioner requested time to file a reply, it was incumbent upon the respondents to provide an opportunity for filing the reply and, thereafter, an opportunity of hearing before passing the assessment order. The Court found that these mandatory procedural requirements were not fulfilled by the respondents before passing the impugned order. Consequently, the Court set aside the impugned order, subject to the petitioner depositing 25% of the disputed amount within four weeks of receiving a copy of the order. The petitioner was then directed to file their reply, if any, within two weeks, and the respondents were directed to provide a personal hearing and decide the matter in accordance with the law. No issue was expressly left undecided.

Key Issues

1. Whether the impugned assessment order, passed ex-parte without granting the petitioner an opportunity to file a reply after a request for time was made, is liable to be set aside, particularly in light of the procedural requirements under the GST law? Petitioner's arguments: The petitioner contended that the respondents failed to grant them an opportunity to file a reply after they sought time on July 12, 2024. They argued that the ex-parte assessment order was passed without fulfilling mandatory procedural requirements, including providing an opportunity for a hearing after receiving a reply. The petitioner was willing to deposit 25% of the disputed amount. Respondents' arguments: The respondents acknowledged that no time was granted to the petitioner after their communication dated July 12, 2024, and that the impugned assessment order was passed thereafter. They agreed to the matter being remanded back for reconsideration, subject to the petitioner paying 25% of the disputed amount.