2024 (2) TMI 998 - HC - GST

Tax Assessment Order Quashed: 10% Tax Remittance Required, Fresh Reasoned Order Mandated Under Section 74 of TNGST Act

HC found assessment order under Section 74 of TNGST Act lacking substantive grounds. Order was quashed with directive for petitioner to remit 10% of ... Unreasoned administrative order - assessment under Section 74 - absence of fraud, wilful misstatement or suppression - failure to satisfy statutory ingredients of a special assessment provision - principles of natural justice - opportunity of personal hearing - quashing subject to terms and remand for fresh assessment - attachment of property consequent to assessment - rectification on account of error apparent on the face of the recordAssessment under Section 74 - absence of fraud, wilful misstatement or suppression - unreasoned administrative order - Validity of the assessment order framed under Section 74 - HELD THAT: - The court examined the impugned assessment order and the preceding show cause notice and found the assessment order to be completely unreasoned. The court further observed that the statutory ingredients necessary to invoke the special assessment provision under Section 74 were not established on the record, there being no allegations or findings of fraud, wilful misstatement or suppression of facts. In view of these deficiencies the court concluded that the assessment could not be sustained and therefore warranted interference. The court quashed the assessment order but did so while placing the petitioner on terms to enable reconsideration. [Paras 6, 7]Assessment order under Section 74 quashed for being unreasoned and for lack of required ingredients; quash granted subject to conditions allowing fresh consideration.Attachment of property consequent to assessment - principles of natural justice - opportunity of personal hearing - quashing subject to terms and remand for fresh assessment - rectification on account of error apparent on the face of the record - Validity of the consequential attachment notice and the course to be followed thereafter - HELD THAT: - The court noted that the petitioner claimed to have filed requisite returns and sought rectification for an apparent error on the face of the record upon learning of the attachment. Although the State maintained that intimations, a show cause notice and personal hearing opportunities were afforded, the court nevertheless found the impugned assessment order defective. Consequently, the attachment notice founded on that assessment was quashed. The court conditioned the quash on the petitioner first remitting 10% of the disputed tax demand within two weeks of receipt of the order, and directed the assessing officer to afford a reasonable opportunity including personal hearing and to pass a fresh assessment within two months of compliance. [Paras 5, 6, 7]Attachment notice quashed; petitioner directed to deposit 10% of disputed tax demand within two weeks, after which fresh assessment to be conducted following opportunity of hearing and concluded within two months.Final Conclusion: The writ petition is allowed in part: the assessment and consequential attachment are quashed, subject to the petitioner depositing 10% of the disputed demand within two weeks; on such compliance the assessing officer shall provide a reasonable opportunity including personal hearing and pass a fresh assessment within two months. No order as to costs. Issues involved:The assessment order under Section 74 of the Tamil Nadu Goods and Services Tax Act, 2017 lacking allegations of fraud, wilful-misstatement or suppression of facts, and being unreasoned. The petitioner seeking rectification based on error apparent on the face of the record and absence of tax dues.Summary:The petitioner challenged an assessment order and an attachment notice, claiming unawareness of prior communications due to having filed GST returns. The assessment order was contested on grounds of lacking Section 74 requirements and being unreasoned, supported by evidence from the GST portal showing no shortfall. The respondent argued that the petitioner had been given opportunities for intimation, show cause notice, and personal hearing, citing adherence to principles of natural justice. The court found the assessment order unreasoned and not meeting Section 74 criteria, quashing it with the condition of remitting 10% of the disputed tax demand within two weeks for a fresh assessment order to be issued within two months. The writ petition was disposed of with no costs.