Vadivel Pyrotech Private Limited VS Assistant Commissioner

This Writ Petition challenges the impugned order in Ref.No:33AADCV5898H1ZV dated 09.05.2022, passed by the Respondent, asserting that it was made in gross violation of principles of natural justice and the procedure prescribed under the Tamil Nadu Goods and Service Tax Act, 2017. The order appears to stem from the scrutiny of the GST returns filed by the petitioner for the period 2018-2019, as is evident from the Preamble to the Show Cause Notice in GST DRC-01 and the impugned Order in GST DRC-07, which states “Summary of Show Cause Notice: M/s. VADIVEL PYROTECHS PRIVATE LIMITED, Door No. 217/G, Setur Road, Sivakasi, 626123, are dealing.

The writ petition challenges the impugned order (Ref.No:33AADCV5898H1ZV dated 09.05.2022) issued by the respondent, alleging it was made in gross violation of the principles of natural justice and the procedures prescribed under the Tamil Nadu Goods and Service Tax Act, 2017. The impugned order was made following the scrutiny of GST returns filed by the petitioner under Section 61 of the TNGST Act for the period 2018-2019. This is evident from the preamble to the Show Cause Notice in GST DRC-01 and the impugned Order in GST DRC-07. The Show Cause Notice and Order both mention that M/s. Vadivel Pyrotechs Private Limited, located at Door No. 217/G, Setur Road, Sivakasi, dealing in fireworks and registered under the TNGST Act, were informed of differences noticed during the scrutiny of their returns under Section 61 of the TNGST Act for the year 2018-2019. Despite various grounds raised against the impugned order, the petitioner’s counsel focuses on the argument that the impugned proceedings are invalid as Rule 99 of the Tamil Nadu Goods Service Tax Rules was not complied with, which is crucial to the validity of the order dated 09.05.2022.

This Writ Petition challenges an order (Ref.No:33AADCV5898H1ZV) dated 09.05.2022 passed by the Respondent, alleging a gross violation of the principles of natural justice and the procedures under the Tamil Nadu Goods and Service Tax Act, 2017, the impugned order follows scrutiny of the GST returns filed by the petitioner under Section 61 of the TNGST Act for the period 2018-2019, evident from the Preamble to the Show Cause Notice in GST DRC-01 and the impugned Order in GST DRC-07, summarizing that M/s. VADIVEL PYROTECHS PRIVATE LIMITED dealing in fireworks, registered under the TNGST Act, had discrepancies noticed during the scrutiny of returns under Section 61 of the TNGST Act, 2017 for the year 2018-2019, though several grounds challenge the impugned order, the petitioner’s counsel confines the challenge on the basis that non-compliance with Rule 99 of the Tamil Nadu Goods Service Tax Rules invalidates the order dated 09.05.2022, the petitioner, engaged in the manufacture and supply of pyrotechnic products (fireworks) and registered under the TNGST Act, periodically filed GST returns and discharged appropriate taxes while availing Input Tax Credit as per Section 16 of the TNGST Act, the Respondent undertook scrutiny of the GST returns under Section 61 of the TNGST Act, issuing a notice in Form ASMT 10 dated 22.12.2021 highlighting discrepancies between GSTR3B, GSTR 1, and GSTR 2A returns for the year 2018-19, calling for the payment of Rs.13,54,250/- along with interest, in response, the petitioner paid the interest, furnished GST-DRC 03 dated 27.12.2021, and submitted an explanation in Form ASMT 11 on 18.01.2022 with relevant details, after more than six months, the petitioner was contacted by the Respondent’s office via telephone to confirm if the taxes, interest, and penalty demanded in the order were paid.

The writ petition challenges an order referenced as Ref.No:33AADCV5898H1ZV dated 09.05.2022 issued by the respondent, alleging a gross violation of natural justice principles and procedures under the Tamil Nadu Goods and Service Tax Act, 2017. The contested order was made following the scrutiny of GST returns filed by the petitioner for the period 2018-2019 under Section 61 of the TNGST Act. According to the show cause notice in GST DRC-01 and the order in GST DRC-07, discrepancies were found in the GST returns. The petitioner, Vadivel Pyrotechs Private Limited, a fireworks manufacturer registered under the TNGST Act, filed GST returns periodically, discharging taxes and availing input tax credit per Section 16 of the Act. The respondent scrutinized the returns and issued a notice in Form ASMT 10 on 22.12.2021, highlighting discrepancies between GSTR3B, GSTR 1, and GSTR 2A returns for 2018-19, and demanded Rs.13,54,250/- in taxes with interest. The petitioner responded by paying the interest and submitting an explanation in Form ASMT 11 on 18.01.2022. After six months, the respondent’s office inquired if the petitioner had paid the taxes, interest, and penalty as per the 09.05.2022 order. The petitioner was unaware of further proceedings beyond the scrutiny under Section 61 and the ASMT 10 notice. Upon inquiry on 12.08.2022, the petitioner learned about the 09.05.2022 order and found the summary of the notice in GST DRC-01 and order in GST DRC-07 uploaded on the GST portal. After downloading and reviewing the documents, the petitioner identified six defects following the scrutiny of returns, including a turnover difference reported in the audited financial statement and GSTR 9 C involving tax of Rs.35,33,657.

This Writ Petition challenges the impugned order in Ref.No:33AADCV5898H1ZV dated 09.05.2022, claiming it violates principles of natural justice and the prescribed procedures under the Tamil Nadu Goods and Service Tax Act, 2017 (TNGST Act). The order was made following scrutiny of the GST returns filed by the petitioner for the period 2018-2019 under Section 61 of the TNGST Act, as stated in the Show Cause Notice and Order. Despite numerous grounds of challenge, the petitioner’s counsel focused on the argument that the order is invalid due to non-compliance with Rule 99 of the Tamil Nadu Goods Service Tax Rules. The petitioner, engaged in manufacturing and supplying pyrotechnic products, filed periodic GST returns under the TNGST Act and paid appropriate taxes while availing Input Tax Credit under Section 16 of the Act. The respondent scrutinized the returns and issued a notice in Form ASMT 10 on 22.12.2021, highlighting discrepancies between GSTR3B, GSTR1, and GSTR2A returns for 2018-19 and demanded payment of Rs.13,54,250/- in taxes and interest. The petitioner responded by paying the interest and submitting an explanation in Form ASMT 11 on 18.01.2022. After more than six months, the respondent inquired if the petitioner had paid the demanded amounts via a telephone call, at which point the petitioner was unaware of any further proceedings beyond the scrutiny resulting in Form ASMT 10 and the response in Form ASMT 11. Upon further inquiry, the petitioner discovered that an order dated 09.05.2022 and related documents had been uploaded to the GST portal, including a Summary of the Notice in GST DRC-01 and Order in GST DRC-07. Upon downloading these documents, the petitioner found six defects noted from the scrutiny of returns: differences in reported turnover and GSTR 9 C involving tax of Rs.35,33,657; availing input tax credit of Rs.4,22,08,872/- based on invoices from sister concerns without e-way bills, violating Section 16 of the TNGST Act; a difference of input tax credit between GSTR2A and GSTR3B involving Rs.13,54,250/-; denial of ITC of Rs.6,34,252/- due to non-accounting of purchases as per the 2A Statement and not availing IGST input tax credit of Rs.5,25,260/- available as per GSTR-2A; availing ineligible blocked credit of Rs.1,91,520/-; and a demand of Rs.15,70,148/- under reverse charge presuming freight value at 5% of inward supplies received. These defects differed from those pointed out in the Form ASMT 10 notice issued on 22.12.2021. The petitioner argues that the entire proceeding was conducted without their knowledge, thus challenging the validity and fairness of the impugned order.

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