Tvl. Sr Realtors vs. The State Tax Officer, Inspection - 1

Held

The Court held that the impugned order dated 30.12.2023, passed by the first respondent, was indeed passed mechanically and did not consider the petitioner's reply and written statement. The Court found that the first respondent had not adverted to the petitioner's reply in Form GST DRC-06 dated 28.10.2023, which acknowledged the details of their written statement. This failure to consider the petitioner's submissions necessitated interference under Article 226 of the Constitution. Consequently, the impugned order was quashed. The Court directed that the quashed order would act as an addendum to the show cause notice. The petitioner was granted liberty to file a fresh reply within 30 days. The respondents were directed to pass fresh orders after duly considering the petitioner's fresh reply and the previously submitted written statement, and to hear the petitioner before passing the order. The respondents were also directed to lift the freezing of the petitioner's bank account. The Court expressly left undecided any issues related to the merits of the tax demand.

Facts

The petitioner, Tvl. SR Realtors, filed a writ petition challenging an order dated 30.12.2023 passed by the first respondent, the State Tax Officer, for the assessment year 2017-2018. This order confirmed a demand proposed in a show cause notice. The petitioner had submitted a reply in Form GST DRC-06 on 28.10.2023 to the show cause notice issued on 29.09.2023. The petitioner contended that the impugned order was passed mechanically without considering their reply and written statement. The respondents are the State Tax Officer, the Deputy Commissioner, and the Joint Commissioner.

Key Issues

1. Whether the impugned order dated 30.12.2023, passed by the first respondent, is liable to be quashed for having been passed mechanically without considering the petitioner's reply and written statement, thereby violating principles of natural justice, particularly in light of Section 75(4) of the CGST Act, 2017, which mandates hearing the taxpayer before passing an order that is detrimental to them? Petitioner's arguments: The petitioner argued that the impugned order was passed mechanically and failed to consider their reply dated 28.10.2023 and the written statement mentioned therein. This failure to advert to the petitioner's submissions amounts to a violation of natural justice and warrants interference under Article 226 of the Constitution. Revenue's arguments: The judgment does not record any specific arguments made by the respondents.