Taxpayer Wins Challenge Against Assessment Order: Procedural Fairness and Natural Justice Prevail in Income Tax Proceedings

Tvl. Diamond Shipping Agencies Private Limited, (Trade Name: Diamond Global Forwarder) Represented by its Joint Managing Director, Mr. P. Sivakumar Versus The Assistant Commissioner (ST), Tuticorin.

Tvl. Diamond Shipping Agencies Private Limited, (Trade Name: Diamond Global Forwarder) Represented by its Joint Managing Director, Mr. P. Sivakumar Versus ... Issues involved:
Quashing of impugned assessment order u/s 169(1)(b) for assessment year 2017-2018 due to violation of principles of natural justice and failure to consider annual returns in GSTR-9 and Auditor's statement for three business verticals.

Issue 1: Violation of principles of natural justice and failure to consider relevant documents

The petitioner contended that the assessment order was passed in violation of the principles of natural justice as the respondent failed to consider the annual returns in GSTR-9 and Auditor's statement filed in GSTR-9C for the three business verticals under the same PAN. The petitioner sought an opportunity to explain these documents to the authorities, which was not granted. Additionally, it was highlighted that the impugned order was passed without serving physical notice or order, contravening Section 169(1)(b) of the Act.

Judgment:
The High Court of Madras, after due consideration, found merit in the petitioner's contentions. It held that the impugned order was indeed passed without serving notice as required by Section 169(1)(b) and without taking into account the existence of three business verticals under the petitioner's PAN. Consequently, the Court decided to quash the impugned order. The respondent was directed to provide an opportunity to the petitioner, including a personal hearing, and to consider all evidences and documents presented by the petitioner. Furthermore, the respondent was instructed to complete the assessment proceedings within eight weeks from the date of receipt of the Court's order.

Outcome:
In light of the above findings, the Writ Petition was allowed by the Madras High Court. No costs were imposed, and the connected miscellaneous petitions were closed accordingly.