Tvl Jothi Stores vs. The Deputy State Tax Officer / Proper Officer

Held

The Court quashed the impugned assessment order dated April 29, 2024, subject to the petitioner depositing 25% of the disputed tax from their electronic cash ledger within 30 days of receiving the order. The petitioner was also directed to file a reply to the notice in DRC-01 dated January 29, 2024, within the same period. If these conditions were met, the respondent was to proceed with passing final orders after hearing the petitioner, preferably within three months. The Court reasoned that while the petitioner's arguments on merits and limitation could not be considered at that stage due to procedural lapses, the impugned order was being set aside conditionally to allow the petitioner an opportunity to present their case. The ratio decidendi is that procedural fairness can be restored by allowing a party to present their case, even after procedural defaults, upon compliance with certain conditions, particularly when the invocation of a specific section and limitation are raised as issues. If the petitioner failed to comply with the stipulations, the writ petition would stand dismissed, and the respondent could recover the amount due. The issue of whether the respondent wrongly invoked Section 74 and if the demand was barred by limitation was not definitively decided on merits but was implicitly allowed to be re-adjudicated upon compliance.

Facts

The petitioner, Tvl. Jothi Stores, represented by its Proprietor M. Natarajan, filed a writ petition challenging an assessment order dated April 29, 2024, passed by the Deputy State Tax Officer/Proper Officer, Sivagangai Assessment Circle. The order confirmed a demand initially proposed in a show cause notice (DRC-01) dated January 29, 2024. The petitioner had previously submitted a representation on December 21, 2023, in response to a pre-intimiation notice (DRC-01A) dated November 29, 2023. The petitioner contended that they had not participated in the proceedings leading to the DRC-01 notice and had not filed an appeal within the stipulated period under Section 107 of the GST enactment.

Key Issues

1. Whether the respondent wrongly invoked the power under Section 74 of the respective GST enactment, rendering the entire demand barred by limitation? Petitioner's Arguments: The petitioner argued that the respondent had wrongly invoked the power under Section 74 of the respective GST enactment and that the entire demand was barred by limitation. The petitioner's counsel submitted this contention at the hearing. Respondent's Arguments: The respondent, through the learned Government Advocate, took notice of the petition. No specific arguments were recorded for the respondent on the merits of the case or the limitation issue.