M/S. N. Mohammed Kasim vs. The Appellate Deputy Commissioner (St)

Held

The Court quashed the impugned assessment orders and appellate orders. The reasoning was based on the admitted fact that the petitioners had not responded to show cause notices or attended personal hearings, leading to adverse orders. The Court found it appropriate to provide an opportunity for the petitioners to present their case. The ratio decidendi is that even if a party fails to respond to notices or attend hearings, the authorities should still ensure a fair process, and in cases of such procedural lapses by the assessee, the Court may intervene to allow a fresh opportunity, subject to certain conditions. The Court directed the cases back to the respondents to pass fresh orders, subject to the petitioners depositing 25% of the disputed tax in cash within 30 days. The petitioners were also directed to file replies to the show cause notices, treating the impugned orders as corrigenda. The respondents were instructed to pass fresh orders on merits after granting a personal hearing to the petitioners. Any pre-deposited amount by the petitioners in W.P(MD)Nos.15965, 15967, and 15968 of 2025 as a condition for filing an appeal was to be refunded subject to the final outcome.

Facts

These four writ petitions were filed by different entities challenging orders passed under the Goods and Services Tax (GST) regime. In W.P(MD)No.15966 of 2025, the petitioner challenged an assessment order dated 19.08.2024 for the tax period 2019-20. In W.P(MD)Nos.15965, 15967, and 15968 of 2025, the petitioners challenged orders from the Appellate Deputy Commissioner (ST) which had dismissed their appeals on grounds of delay, as the appeals were filed beyond the statutory period. The common grievance of the petitioners was that tax liabilities were unfairly imposed. A significant admitted fact across all petitions was that the petitioners had neither responded to the show cause notices nor appeared for personal hearings preceding the assessment orders, leading to adverse orders.

Key Issues

1. Whether the assessment orders and appellate orders, which were passed without the petitioners responding to show cause notices or attending personal hearings, are liable to be quashed as arbitrary and illegal, particularly when the petitioners claim unfair imposition of tax liability under the GST Act? Petitioner's Contention: The petitioners argued that the respondents had unfairly imposed tax liability contrary to the tax provisions. They sought to quash the assessment and appellate orders, contending they were cryptic, illegal, arbitrary, and without jurisdiction, and requested a direction for the appellate authority to decide the appeals on merits. Revenue's Contention: The respondents did not file any specific counter arguments recorded in the judgment. However, the judgment notes the admitted position that the petitioners failed to respond to show cause notices or attend personal hearings, which led to the adverse orders.