![]()
Court Sets Aside Assessment Order Due to Lack of Hearing,
Directs Reconsideration of Case on Payment of 10% Tax
By Yogesh Verma
(CS/LLB) / 2
min read / GST Case Law
Case Summary: Rajat
Foods India vs. The Assistant Commissioner (ST), Washermenpet (C) Assessment
Circle, and Deputy State Tax Officer-1
Case No.: W.P. No. 27043 of 2024 & WMP Nos. 29561 & 29563 of
2024
Date of Order: 19th September 2024
Court: High Court of Judicature at Madras
Judge: Hon'ble Mr. Justice N. Anand Venkatesh
Summary of the Case: Rajat Foods India filed a writ petition challenging the
assessment order passed by the tax authorities for the period from July 2017 to
March 2018. The petitioner argued that the order was issued without affording
them a proper hearing, violating principles of natural justice. The court set
aside the order and allowed the petitioner an opportunity to present its case,
with conditions attached.
Facts of the Case:
1.
The petitioner, Rajat Foods India,
is a registered taxpayer under the TNGST Act, 2017, and has been regularly
filing monthly returns and remitting taxes.
2.
On 8th June 2023, the tax department
issued a notice alleging a mismatch of the input tax credit claimed by the
petitioner under Section 73(5) of the TNGST/CGST Act for the period between
July 2017 and March 2018.
3.
The petitioner's accountant, who was
in charge of handling the case, was unwell and unable to attend the
hearing. As a result, the petitioner was unaware of the issuance of the demand
order and could not present their case.
4.
The tax authorities issued an
assessment order dated 9th November 2023, imposing a tax liability of ₹5,89,004
on the petitioner.
Submissions by the Petitioner:
·
The petitioner argued that the
assessment order was passed without giving them an opportunity to present
their case, which violated the principles of natural justice.
·
The petitioner further submitted
that their accountant’s illness was the reason they were unable to respond to
the notice, and they had sufficient documents to substantiate that there was no
mismatch between their GSTR 3B and GSTR 1 filings.
Submissions by the Respondent:
·
The respondent’s counsel argued that
the notice was duly issued, and sufficient opportunity was provided to the
petitioner to respond. The petitioner, however, failed to utilize the
opportunity, and the order was passed accordingly. They contended that the
order was lawful and should not be set aside.
Findings and Judgment:
1.
The court observed that the
petitioner had indeed missed the opportunity to present their case due
to their accountant's illness but had sufficient documents to support their
defense.
2.
The court referred to a
similar case (W.P. No. 26477 of 2024) where it had allowed the
petitioner an opportunity to present their case under specific terms.
3.
Based on these considerations, the
court set aside the impugned order and remanded the matter back to the tax
authorities for reconsideration, subject to the condition that the petitioner
pays 10% of the disputed tax amount within four weeks. If this condition is not
complied with, the original order would automatically be revived.
4.
The petitioner was instructed to
file their reply/objections along with relevant documents within two weeks
after the payment, and the respondent was directed to issue a fresh notice and
afford a personal hearing to the petitioner.
5.
The petitioner’s frozen bank account
was also ordered to be de-freezed, as the writ petition was allowed.
Conclusion: The court set aside the tax assessment order, provided the
petitioner an opportunity to present their case, and directed the tax
authorities to re-examine the case after the petitioner fulfills
certain conditions.
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.
Find the Attachment (Press on Click Here )
Click here
