M/S Raashi Constructions vs. The Assistant Commissioner Of Commercial Taxes

Facts

The petitioner, M/s Raashi Constructions, challenged an Adjudication Order dated 10.12.2025, a summary of that order, and a Garnishee Notice dated 31.07.2026, all pertaining to the tax period April 2021 to March 2022. The Adjudication Order was passed by the Assistant Commissioner of Commercial Taxes (respondent) for the tax period April 2021 to March 2022. The petitioner contended that notices regarding the proceedings were sent to their auditor's email addresses, which had changed, and that they lacked awareness of the proceedings and the specific email addresses used. Consequently, they could not present their records and reconciliation to the adjudicating authority. The respondent confirmed the Show Cause Notice proposition, citing the petitioner's non-appearance and failure to avail opportunities.

Held

The Court allowed the petition in part. It quashed the impugned Adjudication Order, its summary, and the Garnishee Notice. The Court reasoned that the petitioner's explanation for non-participation, citing misdirected notices to their auditor's outdated email addresses and consequent lack of effective knowledge, was persuasive. The Court opined that the petitioner must be granted another opportunity to present their case before any demand is enforced. The Court emphasized that if the petitioner could justify their case against the alleged mismatch based on reconciliation, it should be considered to avoid protracted litigation and potentially unjustified liability. The Court directed the petitioner to file a response to the Show Cause Notice along with a detailed reconciliation on 11.11.2026 and to deposit 10% of the tax GST subject to the outcome of the restored proceedings.

Key Issues

1. Whether the petitioner had effective knowledge of the adjudication proceedings concerning the tax period April 2021 to March 2022, as required by law, considering the alleged misdirection of notices to outdated email addresses of their auditor? (Mixed question of law and fact, turning on principles of natural justice and procedural fairness under GST law). 2. Whether the petitioner's explanation for non-participation in the adjudication proceedings, citing changes in auditor's email addresses and lack of awareness, demonstrates bonafides warranting a fresh opportunity to present their case? Petitioner's Arguments: The petitioner argued that communications were sent to outdated email addresses of their auditor, leading to a lack of effective knowledge of the proceedings. They claimed that their payments, inclusive of GST/TDS at 12%, were received from the Garrison Engineer [Air Force] and declared in Form GSTR-7 and Form GSTR-3B. They asserted that reconciliation would show no significant mismatch, or only a marginal one, contrary to the allegations. Revenue's Arguments: The respondent, through the High Court Government Pleader, argued that the petitioner had not availed the opportunities extended through the Show Cause Notice and personal hearing, and proceedings could not be indefinitely delayed due to the petitioner's non-appearance.