The Madurai Bench of Madras High Court presided by Mr. Justice M. Nirmal Kumar has quashed the assessment order passed without giving a proper opportunity for a personal hearing under section 74(1) of the Goods and Service Tax Act.
The petitioner, M/s. Anantham Silks was engaged in the trading of textiles and garments. During the course of the surprise inspection, the inspection team found certain irregularities in the transactions of the dealers, and a revision of the assessment was made based on the inspection report. The petitioner failed to give a proper explanation with supporting documents, hence respondent confirmed the demand of tax, penalty, and interest as already proposed made in Form DRC-01A for the four assessment years. The aggrieved petitioner filed a Writ petitions before the High Court.
The counsel for the petitioner submits that the inspection and investigation have been conducted by different officers in a wrong manner, resulting in a misunderstanding of facts and misinterpretation of provisions, misapplication of tariff, and exemption notifications. The learned counsel also submits that the proceedings carried out were completely perverse and information and statements collected with intimation, an inducement of dropping of proceedings, are in complete violation of principles of natural justice and unreliable and the demand made in Form DRC-01A has to be rejected.
The single bench observed that the respondent failed to follow the procedure since the petitioner has got any objection and not paid tax as ascertained, a show cause notice has to be issued under Section 74(1) of the TNGST Act and after receiving objections, giving personal hearing, the assessment order ought to have been finalized.
The High Court while allowing the Writ petition has held that “the respondent is directed to issue notice after following the procedures prescribed under the TNGST Act and issue show cause notice and after giving an opportunity to file their objections, pass appropriate orders on merits and in accordance with law.”
Comments