2024 (4) TMI 775 - HC - GST

Legal Challenge Succeeds: Tax Assessment Order Overturned Due to Insufficient Reasoning and Procedural Flaws

Tvl. Sri Rahaventher Industries Rep by its Proprietor S. Varatharaju Versus Union of India, The Goods and Service Tax Council, The State of Tamil Nadu, Principal Secretary/commissioner of Commercial Taxes, The State Tax Officer

The HC allowed the writ petition challenging a tax assessment order due to procedural irregularities. The court found the respondents' order lacking ... Violation of principles of natural justice - non-speaking order - period between July 2017 to March 2018 - HELD THAT:- It is noticed that the impugned order is not a speaking order. It has also not considered the reply filed by the petitioner on 01.11.2023 which has been referred to in Item No.3 in the reference column to the impugned order. As the impugned order is without proper reasoning, it is liable to be set aside and remitted back to the respondents to pass a fresh order on merits and in accordance with law within a period of six weeks from the date of receipt of a copy of this order. The writ petition is disposed off Issues involved:The judgment involves challenging an impugned order related to tax assessment for the period between July 2017 to March 2018, focusing on the mismatch in Input Tax Credit availed in GSTR-3B returns compared to GSTR-2B/2A.Details of the judgment:The petitioner challenged the impugned order dated 30.12.2023 concerning the assessment year for the tax period between July 2017 to March 2018, the first year after the implementation of the demand. The petitioner contended that they had responded to the show cause notices but the respondents proceeded to pass the impugned order without proper consideration of the petitioner's reply. The impugned order highlighted a mismatch in Input Tax Credit availed in GSTR-3B returns compared to GSTR-2B/2A, indicating an excess claimed amount that reduced the output tax payment. The order initiated demand and recovery action u/s 73(1) of the TNGST Act / CGST Act 2017 due to the alleged discrepancies. The respondents opposed the challenge, arguing that the petition was beyond the limitation period and referred to a Supreme Court decision. However, the Court noted that the impugned order lacked proper reasoning and did not consider the petitioner's reply filed on 01.11.2023. Consequently, the Court deemed the order as not sustainable and directed it to be set aside and remitted back to the respondents for a fresh order within six weeks. The Writ Petition was disposed of with this observation, and no costs were awarded.