M/S.Santhanalakshmi Traders vs. The State Tax Officer

Facts

The petitioner, M/s. Santhalakshmi Traders, filed a writ petition challenging an ex parte order dated 29.02.2024 passed by the 1st Respondent (State Tax Officer) and a consequential Form GST DRC-07 dated 29.02.2024 issued by the 2nd Respondent (Commercial Tax Officer). The petitioner contended that they were unaware of the proceedings as notice was served only through the online portal. The impugned order pertains to the tax period 2018-19. The amount in dispute is not explicitly stated but is implied by the direction to deposit 25% of the disputed tax amount. The procedural history involves the issuance of the ex parte order and the subsequent challenge through a writ petition.

Held

The Court held that the ex parte order was passed without the petitioner being aware of the proceedings. To provide relief, the Court directed the petitioner to deposit 25% of the disputed tax amount through the electronic cash ledger within thirty days of receiving a copy of the order. Upon compliance, the attachment on the petitioner's Input Tax Credit (ITC) account would be raised forthwith, and the impugned order would stand quashed. The petitioner would then be required to reply to the show cause notice within thirty days thereafter. The respondent authorities were directed to provide an opportunity of personal hearing and pass a final order within two months. The Court also stipulated that if the petitioner failed to comply with the deposit and reply within the specified periods, the benefit of this order would be automatically recalled, and the impugned order could be enforced. The Court did not expressly leave any issue undecided.

Key Issues

1. Whether the ex parte order passed by the respondent authorities is liable to be quashed on the ground of non-receipt of proper notice, particularly when notice was served only through the online portal? (Question of law and fact, relating to principles of natural justice and procedural compliance under GST law). Petitioner's contention: The petitioner argued that the ex parte order was passed without their knowledge due to notice being served solely through the online portal, thus violating principles of natural justice. They sought to quash the impugned order. Revenue's contention: The learned Government Advocate submitted that in similar matters, reliefs were granted by directing the assessee to deposit 25% of the disputed tax amount. This implies the revenue's stance that the order might be upheld or modified with a condition for compliance.