R Balamurugan vs. Assistant Commissioner Of GST And Ce

Facts

The petitioner, a cable TV operator, was issued three Service Tax registrations despite conducting a single business. The Assistant Commissioner of GST & CE passed best judgment assessment orders for the assessment years 2015-2016, 2016-2017, and 2017-2018 on June 2, 2022, after the petitioner failed to file a reply to the show cause notice dated April 28, 2021, and did not avail the personal hearing opportunity. The petitioner filed three writ petitions challenging these orders only after recovery proceedings were initiated. The court noted the triplication of registrations as a likely cause for the issue.

Held

The Court acknowledged that the writ petitioner was not strictly entitled to indulgence due to their failure to respond to the show cause notice and attend the personal hearing. However, the Court observed that a triplication of registrations had occurred, which might have contributed to the situation. To provide some relief, the Court directed the petitioner to remit a sum of Rs. 2,00,000/- towards the impugned demand. Upon this payment and the petitioner filing their reply, the impugned assessment orders would stand quashed. The assessing officer was then directed to grant an opportunity of personal hearing to the petitioner and pass a fresh order on merits and in accordance with law. The Court explicitly stated that it had not gone into the merits of the matter. The writ petitions were allowed on these terms.

Key Issues

1. Whether the best judgment assessment orders passed by the Assistant Commissioner of GST & CE are liable to be quashed on the grounds of procedural irregularities and the petitioner's failure to respond to the show cause notice and attend the personal hearing. Petitioner's contention: The petitioner, while not explicitly arguing on merits due to not filing a reply, implicitly sought relief from the assessment orders, which were passed ex-parte. The delay in filing the writ petitions was attributed to the initiation of recovery proceedings. Revenue's contention: The revenue, through the Assistant Commissioner and Superintendent of GST & CE, contended that the assessment orders were passed in accordance with law due to the petitioner's non-compliance with the show cause notice and personal hearing opportunity. No specific provisions or precedents were cited by either party in the judgment.