Tax Assessment Order Quashed: Violation of Natural Justice Principles Leads to Rehearing and Fresh Order Issuance HC addressed tax assessment orders challenging breach of natural justice principles. After reviewing inspection discrepancies and petitioner's ...
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Tax Assessment Order Quashed: Violation of Natural Justice Principles Leads to Rehearing and Fresh Order Issuance
HC addressed tax assessment orders challenging breach of natural justice principles. After reviewing inspection discrepancies and petitioner's submissions, the court quashed the impugned assessment order. HC directed the assessing officer to provide a personal hearing, issue fresh assessment orders within two months, and allow the petitioner to remit specified amounts within a set timeframe. The writ petitions were disposed of without costs.
Issues involved: Three separate orders dated 29.02.2024 are challenged primarily on the ground of breach of principles of natural justice.
Details of the judgment:
1. Inspection and discrepancies: An inspection was conducted u/s 67 of the Tamil Nadu Goods and Services Tax Act 2017, where 15 discrepancies were pointed out. The petitioner submitted a reply for each discrepancy. The 1st respondent issued an intimation on 20.09.2023, followed by a show cause notice on 10.11.2023 and the impugned assessment order on 29.02.2024 without granting an extension requested by the petitioner.
2. Contentions of the petitioner: The petitioner addressed each discrepancy in the reply dated 15.02.2023. Specifically, regarding Input Tax Credit (ITC) reversal for non-payment for 180 days, the petitioner provided an ageing report for sundry creditors. The petitioner claimed entitlement to ITC for delayed payments subject to interest. The petitioner's reply during inspection was allegedly disregarded, and turnover from Andhra Pradesh was included despite the petitioner's request for exclusion. The petitioner provided a trial balance for turnover from Tamil Nadu.
3. Agreement for remittance: The petitioner agreed to remit specified amounts for different assessment years, excluding disputed tax demands related to ITC reversal and turnover differences.
4. Respondent's submissions: The respondent contended that the petitioner had multiple opportunities to contest the tax demand and was offered a personal hearing on three occasions. Submission of documents during inspection did not relieve the petitioner from the obligation to respond to the show cause notice and participate in assessment proceedings.
5. Court's observations: The court noted that the petitioner responded to all discrepancies during the inspection, including providing necessary documents. The impugned assessment orders were deemed questionable, and the petitioner was directed to remit specified amounts within a set timeframe. The assessing officer was instructed to provide a reasonable opportunity for a personal hearing and issue fresh assessment orders within two months.
6. Final decision: The impugned assessment order was quashed subject to the conditions mentioned above. The writ petitions were disposed of with no order as to costs, and connected miscellaneous petitions were closed.
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