Korba Steel Castings vs. State Of Chhattisgarh

Held

The Court, while acknowledging the petitioner's plea of violation of natural justice, noted the petitioner's willingness to deposit 50% of the assessed tax liability, amounting to Rs. 4,08,885.84. The Court exercised its power under Article 226 of the Constitution to do complete justice. It granted the petitioner an opportunity to file a statutory appeal against the order dated 13.12.2023 before the appellate authority within one month from the receipt of the order. The Court directed the appellate authority to decide the appeal on its merits without insisting on the delay, having condoned it on the condition of depositing 50% of the tax liability. The petitioner was granted liberty to raise all available defenses, including the ex-parte nature of the order, before the appellate authority. The issue of statutory limitation raised by the State was implicitly addressed by the Court condoning the delay. The Court did not decide the merits of the assessment itself.

Facts

The petitioner, Korba Steel Castings Proprietorship Firm, challenged an ex-parte assessment order dated 13.12.2023 passed by the State Tax Officer, Korba Circle-II. This order imposed a tax liability of Rs. 8,17,771.69, including interest and penalty, without issuing a show cause notice or affording the petitioner an opportunity of hearing, allegedly violating Sections 61, 73, and 169 of the GST Act, 2017. The petitioner also challenged a subsequent notice dated 24.03.2026, issued under Section 79(1)(c) of the Act, directing a third party (the petitioner's supplier) to pay the assessed amount from funds payable to the petitioner. The petitioner learned of the assessment order only through its supplier.

Key Issues

1. Whether the ex-parte assessment order dated 13.12.2023, passed by the State Tax Officer, State Tax, Korba Circle-II, is liable to be set aside for violation of the principles of natural justice and fair play, specifically for not issuing a show cause notice and not providing an opportunity of hearing to the petitioner, thereby contravening Sections 61, 73, and 169 of the GST Act, 2017? Petitioner's contention: The petitioner argued that the assessment order was passed ex-parte without any prior notice or hearing, violating natural justice. They became aware of the order only through their supplier, who received a recovery notice. Revenue's contention: The State counsel argued that the petitioner was given sufficient opportunities to respond but failed to do so, hence they cannot claim a violation of natural justice. The order does not warrant interference.