M/S. Nsk Builders Private Limited vs. Proper Officer/Sales State Tax Officer

Held

The Court held that the case was fit for remanding the matter back by setting aside the impugned order. The reasoning was based on the petitioner's submission that a bulk of the demand pertained to services provided before the implementation of GST and their inability to respond to the show cause notice and attend personal hearings due to intervening natural calamities. The Court acknowledged the petitioner's plea for an opportunity to explain their case. The ratio decidendi is that where a significant portion of a demand pertains to a period prior to the introduction of a new tax regime, and the assessee provides plausible reasons for not responding to notices due to unforeseen circumstances, the High Court may, in its discretion, set aside the order and remand the matter for fresh consideration, subject to certain conditions. The operative direction was to set aside the impugned order and treat it as an addendum to the show cause notice. The petitioner was directed to deposit 10% of the disputed tax within 30 days and file a reply with evidence within a period to be extended by the respondent. The respondent was expected to complete the proceedings within 6 months. No issue was expressly left undecided.

Facts

The petitioner, M/S. NSK Builders Private Limited, filed a writ petition challenging an order dated 30.12.2023 passed by the Proper Officer/Sales State Tax Officer. The impugned order confirmed a demand for the assessment year 2017-18. The petitioner had initially received a show cause notice on 29.09.2023 but failed to reply and sought repeated adjournments for personal hearings. The petitioner contended that a significant portion of the demand, amounting to Rs. 1,51,78,828/-, pertained to services rendered before the implementation of GST on 01.07.2017. They claimed inability to procure necessary details due to monsoon and floods, preventing a timely reply. The respondent argued that the petitioner had an alternate remedy under Section 107 of the GST enactment and that the writ petition was filed beyond the period of limitation.

Key Issues

1. Whether the petitioner, having failed to reply to the show cause notice and attend personal hearings, is entitled to an opportunity to present their case, particularly concerning a demand largely relating to pre-GST services, despite the existence of an alternate remedy under Section 107 of the GST enactment? (Mixed question of law and fact, concerning principles of natural justice and availability of alternate remedy). 2. Whether the writ petition, filed on 04.06.2024 against an order dated 30.12.2023, is barred by limitation, as argued by the respondent citing the Supreme Court decision in Assistant Commissioner (CT) LTU, Kakinada and others Vs. Glaxo Smith Kline Consumer Health Care Limited? (Question of law). Petitioner's arguments: The petitioner argued that a substantial part of the demand was unsustainable as it related to services provided before GST implementation. They sought one opportunity to explain their case, claiming inability to respond to the show cause notice and attend hearings due to intervening natural calamities (monsoon and floods) which hindered their ability to procure essential documents from government departments. They expressed confidence in convincing the department about the other demands based on their submissions. Respondent's arguments: The respondent argued that the petitioner had an efficacious alternate remedy under Section 107 of the respective GST enactment before the Appellate Deputy Commissioner, and therefore, the writ petition should be dismissed. Additionally, the respondent contended that the writ petition was filed beyond the period of limitation, referencing a Supreme Court judgment.