M/S. Vikas Silks vs. The Assistant Commissioner (St)

Held

The Court held that while the petitioner had not cooperated by filing the invoices in time and had failed to attend the personal hearings, a re-hearing could be granted. The Court directed the petitioner to deposit 10% of the disputed tax as a condition for this re-hearing. Subject to this deposit, the respondent was ordered to hear the case afresh and pass an order on merits in accordance with the law. The impugned order would stand quashed upon the deposit of the specified amount. The Court did not explicitly decide on the merits of the original dispute regarding the invoices, but rather facilitated a fresh opportunity for the petitioner to present their case.

Facts

The petitioner, M/s. Vikas Silks, filed two writ petitions challenging orders dated 26.07.2023 and subsequent orders dated 23.02.2024 by the Assistant Commissioner (ST), Rajapalayam, which rejected their request for rectification. The dispute arose from an inspection of the petitioner's business premises, leading to a notice in GST DRC-01A on 15.11.2022, to which the petitioner replied on 28.12.2022. A further notice in GST DRC-01 was issued on 07.03.2023, followed by personal hearing notices on 24.03.2023 and 05.05.2023. The core issue was the non-production of original invoices for tax periods 2019-2020 and 2020-2021. The petitioner had sought time to produce invoices, but failed to appear for the scheduled hearings, resulting in an adverse order.

Key Issues

1. Whether the petitioner is entitled to an opportunity to produce original invoices for tax periods 2019-2020 and 2020-2021, despite failing to appear for personal hearings and produce them earlier? (Mixed question of law and fact, concerning principles of natural justice and procedural compliance under the GST Act). Petitioner's arguments: The petitioner contended that they are in possession of the required invoices and sought one more opportunity to produce them to substantiate their case. They argued that providing this opportunity would allow them to present their case effectively. Revenue's arguments: The respondent argued that the writ petitions were devoid of merit and that the petitioner had an alternative remedy under Section 107 of the TNGST Act, 2017, making the writ petitions liable for dismissal. The respondent further submitted that the petitioner neither possessed the invoices at the time of inspection or reply nor attended the personal hearings despite notices.