Tvl. V M Chakaravarthy Enterprises vs. Commercial Tax Officer/ Proper Officer

Held

The Court decided to set aside the impugned order dated 09.10.2023 and remit the case back to the first respondent (Commercial Tax Officer/Proper Officer) for passing fresh orders on merits and in accordance with law within 60 days. The Court noted the petitioner's submission to deposit 10% of the disputed tax as a condition for setting aside the order. The impugned order, now quashed, is to be treated as a corrigendum to the show cause notices. The petitioner is to be heard by the first respondent before fresh orders are passed. The Court found merit in the petitioner's plea regarding lack of awareness due to registration cancellation, overriding the revenue's contention of an alternate remedy. The ratio is that where a party's registration is cancelled and they are unaware of subsequent proceedings due to non-access to the portal, principles of natural justice necessitate a fresh hearing before passing adverse orders, even if an alternate remedy exists.

Facts

The petitioner, Tvl.V.M.Chakaravarthy Enterprises, is challenging an order dated 09.10.2023 passed by the Commercial Tax Officer/Proper Officer, demanding Rs. 23,59,776/- towards tax, interest, and penalty. The petitioner had closed its business and obtained cancellation of its GST registration on 17.05.2023, effective from 30.04.2023. The petitioner claims to have been unaware of subsequent notices issued, which led to the impugned order, as they had not logged into the GST portal after registration cancellation. The impugned order resulted in a communication dated __.01.2024 to the bank for attachment of the petitioner's bank account. The petitioner offered to deposit 10% of the disputed tax as a condition for setting aside the order.

Key Issues

1. Whether the impugned order dated 09.10.2023, demanding Rs. 23,59,776/- and the subsequent bank account attachment notice, are liable to be quashed, considering the petitioner's business closure and GST registration cancellation prior to the issuance of notices leading to the impugned order? (Question of law and fact, concerning principles of natural justice and procedural fairness under GST law). Petitioner's arguments: The petitioner contended that they were unaware of the notices issued after their GST registration was cancelled and that the impugned order was passed without proper intimation. They offered to deposit 10% of the disputed tax as a condition for setting aside the order. Revenue's arguments: The Revenue argued that the petitioner has an alternate remedy by way of an appeal under Section 107(1) of the TNGST Act, 2017, before the Deputy Commissioner (GST Appeals).