Agri Tech Corporation vs. The State Tax Officer

Held

The Court held that while there was a variance in the amounts specified in the impugned order and the recovery notice, the petitioner had not utilized the adjudication mechanism provided under the GST enactments. The Court found it implausible to relegate the petitioner to file an appeal before the Appellate Commissioner at this stage, citing Supreme Court decisions in Singh Enterprises vs. CCE and CCE and Customs vs. Hongo India (P) Limited, which suggest that appeals may not be entertained if rights have been slept over. Following a consistent view in similar circumstances, the Court directed the petitioner to deposit 25% of the disputed tax within thirty days and file a reply to the show cause notice, treating the impugned order as an addendum. If these conditions are met, the impugned order shall stand quashed, and the respondent shall pass fresh orders on merits after hearing the petitioner. Failure to comply would allow the respondent to proceed as if the writ petition was dismissed. No issue was expressly left undecided.

Facts

The petitioner, Agri Tech Corporation, filed a writ petition challenging two orders from the State Tax Officer: an assessment order dated 21.02.2025 confirming a demand of Rs. 19,69,048/- for the assessment year 2020-21, and a consequential recovery order dated 30.05.2025 for Rs. 16,19,496/-. The petitioner claimed they did not notice the show cause notice (DRC-01) issued on 25.11.2024 via the GST portal, despite reminders. The petitioner argued that the discrepancy in the amounts demanded in the two orders and the failure to provide an opportunity to be heard constituted a violation of natural justice. The respondent is the State Tax Officer.

Key Issues

1. Whether the impugned assessment order and consequential recovery order are liable to be quashed on grounds of violation of principles of natural justice, specifically due to the petitioner's alleged non-receipt of the show cause notice and the discrepancy in demand amounts? (Question of law and fact, turning on principles of natural justice and procedural fairness under GST law). Petitioner's arguments: The petitioner contended that the impugned orders were passed in gross violation of the principles of natural justice as they did not receive the show cause notice issued on the GST portal and there was a significant variance between the demand confirmed in the assessment order and the amount sought for recovery in the subsequent notice. They sought to quash these orders and prevent coercive recovery actions. Respondent's arguments: The respondent did not explicitly record arguments in the judgment. However, the court noted that the petitioner failed to respond to the show cause notice and reminders, and did not take advantage of the adjudication mechanism.