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High
Court of Madras Sets Aside Reopened GST Demand Order Against Ella Tea Industry
for FY 2018-2019, Citing Violation of Natural Justice
Case Summary: M/s. ELLA TEA INDUSTRY vs. The Deputy State Tax
Officer-I, Kotagiri Assessment Circle
Court: High
Court of Judicature at Madras
Case Number: W.P.No.19671
of 2024
Date of Order: 08.08.2024
Judge:
Hon'ble Mr. Justice Krishnan Ramasamy
Facts of the Case:
M/s. Ella Tea Industry,
represented by its proprietor Nalini Pearline Thilak, is a registered dealer
under the Tamil Nadu Goods and Services Tax (TNGST) Act. The petitioner was
issued a show cause notice dated 25.11.2021 by the Deputy State Tax Officer-I,
Kotagiri Assessment Circle, for the assessment year 2018-2019. The notice
alleged that the petitioner had claimed excess Input Tax Credit (ITC) in its
GSTR-3B returns. The petitioner responded with supporting documents on
19.12.2022, which led to the dropping of the proceedings by the respondent on
03.01.2023.
Despite the closure of
the matter, the respondent issued another show cause notice on 28.12.2023 for
the same year (2018-2019) on the same grounds. The petitioner again responded
with a detailed reply on 15.02.2024, but the respondent passed a demand order
on 29.04.2024, confirming the original demand without properly considering the
petitioner's submissions.
Petitioner's Submissions:
The petitioner argued
that the respondent's reopening of the case, which had already been resolved,
without new reasons or evidence was unjustified.
The petitioner contended
that the respondent violated the principles of natural justice by not
addressing the grounds raised in the reply.
The petitioner sought to
quash the demand order dated 29.04.2024 and requested a direction for the
respondent to reconsider the submissions.
Respondent's Submissions:
The respondent,
represented by the Government Advocate (Taxes), defended the demand order and
supported the reopening of the case.
Findings and Judgment:
The court found that the
respondent had indeed dropped the initial proceedings after considering the
petitioner's explanations. The court held that reopening the case without
providing specific reasons or addressing the petitioner's detailed reply was contrary
to law and violated the principles of natural justice.
Conclusion: The
court set aside the order dated 29.04.2024 passed by the respondent and
directed them to pass a fresh order after duly considering the petitioner's
submissions. This new order is to be made within eight weeks of receiving the
court's order.
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.
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