Aaa Traders vs. The Assistant Commissioner (St)(Inspection)

Held

The Court held that while the petitioner had delayed in filing their reply, the impugned order, passed under Section 74 of the GST enactments, was liable to be quashed. The Court reasoned that the petitioner could not make submissions on merits due to the delay but, following its consistent view, was inclined to quash the order. The Court decided to remit the case back to the respondent for passing a fresh order on merits. This relief was conditioned upon the petitioner depositing 25% of the disputed tax in cash from their Electronic Cash Register within thirty days of receiving the order. The petitioner was also directed to file a reply to the DRC-01 notice, treating the impugned order as an addendum to the show cause notice. The respondent was directed to pass fresh orders expeditiously, preferably within three months, after hearing the petitioner. Failure to comply with these conditions would allow the respondent to proceed as if the writ petition was dismissed. No issue was expressly left undecided.

Facts

The petitioner, A.A.A. Traders, represented by its Proprietor Allabaksh, filed a writ petition challenging an Assessment Order dated 23.05.2024, passed by the Assistant Commissioner (ST)(Inspection) (Intelligence Wing), Virudhunagar. This order was issued for the Financial Year 2020-21 and followed a notice in DRC-01 dated 09.10.2023. The petitioner had sought an extension of time to reply on 17.04.2024 but failed to file a reply, leading to the impugned order. The petitioner argued that the order was illegal, arbitrary, without jurisdiction, and violative of natural justice. The respondent is the Assistant Commissioner (ST)(Inspection) (Intelligence Wing), Virudhunagar.

Key Issues

1. Whether the impugned Assessment Order dated 23.05.2024, passed under Section 74 of the respective GST enactments, is liable to be quashed for being illegal, arbitrary, without jurisdiction, and violative of principles of natural justice, as contended by the petitioner? Petitioner's contentions: The petitioner argued that the impugned order was passed without affording them an adequate opportunity to file a reply, despite seeking an extension. They contended that the order was therefore violative of the principles of natural justice. The petitioner also argued that the order was passed without jurisdiction and was arbitrary. The petitioner sought to quash the order and prayed for a fresh opportunity to present their case. Respondent's contentions: The respondent, represented by the Additional Government Pleader, did not explicitly record arguments on the merits of the case. However, the Court noted that the petitioner had 'slept over the rights for a sufficiently long period of time', implying a potential argument regarding delay or laches.