Madras High Court has overturned a GST assessment order involving Ace Industrial Gases Pvt. Ltd., due to inadequate communication about the proceedings.
Case Background
- Petitioner: Ace Industrial Gases Pvt. Ltd., represented by its Director, Mr. Kabilan
- Respondent: The Assistant Commissioner (ST), Gummidipoondi Assessment Circle
- Legal Representation: M/s. Sri Harini S.P for the petitioner, Mr. C. Harsha Raj, Additional Government Pleader (Taxes), for the respondent
- Case Number: W.P.No.13458 of 2024
- Judgement Date: June 10, 2024
- Judge: The Honourable Mr. Justice Senthilkumar Ramamoorthy
Key Issues
Ace Industrial Gases Pvt. Ltd. challenged the assessment order from November 21, 2023. They argued that the authorities did not inform them about the proceedings, as they only uploaded the show cause notice (SCN) and the impugned order on the GST portal. The authorities did not use any other mode of communication to inform the petitioner.
Petitioner’s Argument
The petitioner admitted they made an error while filling out the GSTR 3B returns. They entered amounts in the RCM column instead of the ‘all other ITC’ column. The petitioner’s representative, Sri Harini S.P, argued that only eligible Input Tax Credit (ITC) was claimed. They asked for a chance to prove this. The petitioner agreed to pay 10% of the disputed tax demand as a condition for reassessment.
Respondent’s Argument
Mr. C. Harsha Raj, representing the respondents, said they followed natural justice principles by issuing a show cause notice and a personal hearing notice.
Court’s Decision
The court noted that the tax proposal in the impugned order was about the alleged wrongful availment of ITC. Justice Senthilkumar Ramamoorthy said the petitioner should be allowed to contest the tax demand on its merits.
Order Highlights
- Impugned Order Set Aside: The court quashed the assessment order dated November 21, 2023.
- Condition for Remand: The petitioner must remit 10% of the disputed tax demand within two weeks from receiving the court’s order.
- Reconsideration and Hearing: The petitioner can submit a reply to the show cause notice within this period. After confirming the 10% payment, the respondent must provide a personal hearing and issue a new assessment order within three months.
- Issuance of Fresh Assessment Order: The respondent must issue a new assessment order within three months from receiving the petitioner’s reply.
This decision ensures the petitioner is given a fair chance to contest the tax demand, adhering to natural justice principles. The court also closed the connected miscellaneous petition.
The case highlights the importance of proper communication and natural justice in tax assessment proceedings.
Case Reference : Read Order.
LinkedIn Link : RMPS Profile
This article is only a knowledge-sharing initiative and is based on the Relevant Provisions as applicable and as per the information existing at the time of the preparation. In no event, RMPS & Co. or the Author or any other persons be liable for any direct and indirect result from this Article or any inadvertent omission of the provisions, update, etc if any.
