Case
Summary: Star Health and Allied Insurance Company Ltd. v. Commissioner of ST
Court: Madras High Court
Writ
Petition No.: 30494 of 2023
Date
of Order: October 20, 2023
Facts
of the Case:
Star Health and Allied Insurance Company Ltd.,
represented by its Authorized Signatory Mr. Nitesh Kambli, filed a writ
petition challenging an impugned order of assessment dated June 29, 2023. This
order, issued by the Deputy Commissioner (ST) of the Large Taxpayers Unit,
Chennai, demanded a staggering tax amount of ₹103,68,32,830 for the assessment
year 2019-2020. The basis for this demand was a show cause notice dated April
21, 2023. The petitioner contended that these orders were issued without proper
consideration of their replies and without providing adequate opportunities for
them to present their case.
Submissions
by the Petitioner:
1.
Violation of Natural Justice: The petitioner argued that the principles of natural justice
were breached as their responses to the initial notice dated December 22, 2022,
were disregarded. Both the show cause notice and the assessment order were
issued without addressing the points raised in the petitioner’s replies.
2.
Insufficient Time for Response: The petitioner was granted insufficient time to respond to the
show cause notices and to submit the necessary documents. Notably, the third
hearing notice was uploaded on June 21, 2023, at 9:52 p.m., with a hearing
scheduled for June 23, 2023, giving the petitioner less than 36 hours to
respond.
3.
Lack of Detailed Grounds:
The petitioner highlighted that the basis for the tax demand was not clearly
stated in the show cause notice, making it vague and ambiguous.
4.
Failure to Properly Serve Notices: The hearing notices were only uploaded on the online portal and
not served physically, causing delays in the petitioner’s awareness and
response.
Submissions
by the Respondent:
1.
Adequate Opportunities Provided: The respondent contended that the petitioner was afforded
three opportunities to present their case and submit the required documents.
2.
Petitioner’s Failure to Comply: The respondent argued that the petitioner failed to produce the
documents referred to in their own replies, despite being given multiple
opportunities.
3.
Adherence to Legal Procedures: The respondent maintained that the assessment and demand were
conducted in compliance with the relevant provisions of the Tamil Nadu Goods
and Services Tax Act, 2017.
Judgment:
The Hon'ble Mr. Justice Krishnan Ramasamy
observed that although three opportunities were nominally provided to the
petitioner, they were insufficient and did not constitute fair opportunities.
The court noted that the last notice provided less than 36 hours for the
petitioner to prepare and submit their documents, which was unreasonable.
The court emphasized that sufficient time
should be provided to assessees to file their replies and documents to ensure a
fair hearing. The impugned order of assessment did not comply with this
requirement, leading to a violation of the principles of natural justice.
Moreover, the assessment order lacked a
detailed explanation of why the petitioner’s replies were not acceptable,
failing to pass a speaking order that addressed the petitioner’s objections
comprehensively.
Conclusion:
The court set aside the impugned assessment
order dated June 29, 2023, and remanded the matter back to the second
respondent for fresh consideration. The respondent was directed to provide a
personal hearing on November 16, 2023, and allow the petitioner to file their
reply along with all supporting documents. The respondent was instructed to
pass a fresh assessment order by December 12, 2023, ensuring it addressed all
issues raised by the petitioner.
The writ petition was allowed, and the
connected writ miscellaneous petition was closed. The matter was scheduled for
reporting compliance on December 14, 2023.
This order underscores the judiciary's
commitment to ensuring fair procedures and upholding the principles of natural
justice in tax assessment cases, thereby protecting the rights of taxpayers
against administrative arbitrariness.
Disclaimer: All the Information is based on the notification, circular and order issued by the Govt. authority and judgement delivered by the court or the authority information is strictly for educational purposes and on the basis of our best understanding of laws & not binding on anyone.
