M/S Hello Fashion World vs. The Deputy State Tax Officer -1

Held

The Court held that while the respondent's actions might have been based on statutory provisions, the fact that 99% of the disputed tax had already been recovered, coupled with the petitioner's explanation for not filing a timely appeal (reliance on a chartered accountant and the accountant's failure to inform), warranted a reconsideration of the matter. The Court found that the petitioner's reply to the Show Cause Notice was not considered, which was a significant procedural lapse. Therefore, the impugned order was quashed. The matter was remitted back to the respondent to pass a fresh order on merits after providing the petitioner an opportunity to be heard. The respondent was directed to pass the fresh order within three months from the date of receipt of a copy of this order. No specific finding was made on the jurisdiction or violation of statutory provisions beyond the procedural lapse.

Facts

The petitioner, M/s. Hello Fashion World, a small proprietary concern, filed a writ petition challenging an assessment order dated 30.12.2023 in Form GST DRC-07, issued by the Deputy State Tax Officer-1, Tiruverumbur Assessment Circle. The petitioner argued that 99% of the disputed tax had already been recovered and that their reply to the Show Cause Notice (Form GST DRC-01) was not considered before the impugned order was passed. The petitioner attributed the delay in filing a statutory appeal or rectification application to their reliance on a chartered accountant who failed to inform them of the order promptly. The respondent contended that the petitioner had forfeited their rights and cited Supreme Court decisions to support dismissal.

Key Issues

1. Whether the impugned assessment order dated 30.12.2023, issued in Form GST DRC-07 by the respondent, is liable to be quashed for being without jurisdiction and in violation of statutory provisions, particularly in light of the petitioner's submission that their reply to the Show Cause Notice was not considered? Petitioner's arguments: The petitioner contended that the order was passed without considering their reply to the Show Cause Notice, rendering it procedurally flawed and liable for quashing. They also highlighted that a significant portion of the disputed tax had already been recovered. Respondent's arguments: The respondent argued that the petitioner had forfeited their right to challenge the order due to procedural delays and cited Supreme Court decisions in Assistant Commissioner (CT), LTU, Kakinada and others v. Glaxo Smith Kline Consumer Health Care Limited and M/s. Singh Enterprises v. Commissioner of Central Excise, Jamshedpur and others, suggesting the writ petition was not maintainable.