2024 (8) TMI 1248 - HC - GST

Glassware Business Wins Challenge to GST Assessment, Granted Opportunity to Contest Tax Demands with Partial Payment

Sri Vaigai Glass House & Fabricators Versus Deputy Commercial Tax Officer (ST), Erode

HC quashed GST assessment orders for multiple periods involving a glassware business. The court remanded the case, allowing the petitioner to contest tax ... Challenge to assessment orders relating to assessment periods 2017-2018, 2018-2019, 2019-2020 and 2020-2021 - orders issued without hearing the petitioner - violation of principles of natural justice - HELD THAT:- On account of the cancellation of the petitioner's GST registration on 06.11.2019, the petitioner would have had little reason to monitor the GST portal on an ongoing basis. The orders impugned herein indicates clearly that such orders were issued without hearing the petitioner. As regards assessment periods 2017-2018 and 2018-2019, the exemption under Notification No.10/2019 was not available. The petitioner submits that the petitioner agrees to remit 5% of the disputed tax demand as a condition for remand in assessment years 2017-2018 and 2018-2019. As regards the period subsequent thereto, she submits that the petitioner was entitled to exemption under Notification No.10/2019. By taking into account the cancellation of registration with effect from 06.11.2019 and Notification No.10/2019, it is just and appropriate that the petitioner be provided an opportunity to contest the tax demand pertaining to the respective assessment period, albeit by putting the petitioner on terms with regard to assessment periods 2017- 2018 and 2018-2019. The impugned assessment orders are quashed subject to the condition that the petitioner remits 5% of the disputed tax demand as regards assessment years 2017-2018 and 2018-2019 within a period of two weeks from the date of receipt of a copy of this order - Petition disposed off. Issues:1. Assessment orders for multiple periods challenged due to cancellation of GST registration.2. Petitioner's assertion of unawareness of proceedings due to cancellation and lack of communication.3. Exemption under Notification No.10/2019 for certain assessment periods.4. Request for remand for reconsideration of assessment orders.5. Quashing of impugned assessment orders subject to conditions.Detailed Analysis:1. The judgment involves five writ petitions challenging assessment orders for the periods 2017-2018, 2018-2019, 2019-2020, and 2020-2021 in relation to the cancellation of the petitioner's GST registration. The petitioner, engaged in the business of glasswares, opted for the composition scheme under Section 10 of the GST enactments. The petitioner claims to have filed returns for the assessment periods until the cancellation of GST registration on 06.11.2019. The crux of the issue lies in the petitioner's contention that they were unaware of the assessment proceedings as all notices and orders were uploaded on the GST portal without any other form of communication.2. The petitioner's counsel argued that the cancellation of registration on 06.11.2019 led to the petitioner not monitoring the GST portal, as it was no longer necessary. Reference was made to Notification No.10/2019, exempting certain persons from registration if their turnover did not exceed Rs.40 lakhs. The counsel contended that since the petitioner's turnover was below the threshold for the assessment periods 2019-2020 and 2020-2021, registration was not mandatory. The lack of a reasonable opportunity provided to the petitioner before issuing the impugned orders led to the request for remand for reconsideration.3. The Government Advocate representing the respondent argued that even after registration cancellation, it was the petitioner's responsibility to monitor the GST portal. The assessment for the period 2017-2018 was done on a best judgment basis due to the petitioner's non-participation in the proceedings. The petitioner's lack of monitoring post-registration cancellation was highlighted, indicating a lack of communication and hearing before issuing the impugned orders.4. The judgment considered the impact of the registration cancellation and Notification No.10/2019 on the petitioner's obligation to contest the tax demands for the respective assessment periods. It was deemed just and appropriate to provide the petitioner with an opportunity to contest the tax demands, especially for the assessment years 2017-2018 and 2018-2019, subject to the condition of remitting 5% of the disputed tax demand.5. Consequently, the impugned assessment orders were quashed with the condition that the petitioner remits the specified amount within a stipulated time frame. The petitioner was granted the opportunity to respond to the show cause notice and given a chance for a personal hearing before fresh assessment orders were issued within a specified period. The writ petitions were disposed of without costs, and connected miscellaneous petitions were closed as per the terms outlined in the judgment.