Case Title | ARSK Hardware and Traders, Madurai Vs State Tax Officer Madurai, Madras |
Court | Madras High Court |
Honorable Judges | Justice J. Nisha Banu |
Citation | 2021 (4) GSTPanacea 21 HC Madras |
Judgement Date | 23-April- 2021 |
Council for Petitioner | B. Sivaraman |
Council for UOI | |
Council for State | J. Padhmavati Devi |
The Madurai High Court bench of Justice J Nisha Banu has held that The department is ought and expected to use the application of mind and give a fair opportunity of being heard before passing any pre assessment final order
Section 75 & Section 125 - FACTS OF THE CASE
The respondent (GST Authority) has passed an assessment order to the petitioner(assessee) dtd 7th Feb 2020. As on 30th Oct 2019 and 1st Nov 2019 the place of business of assesse was inspected and due to presence of certain defects the assessee called upon dtd 4th Nov 2019 to produce GSTR 3b/ Profit and Loss A/c and Balance sheet/ all invoices, e way bills and other incidental books of business for the tax period 2017-18, 2018-19 and 2019-20.
On the verification the respondent submits that during check it was found that on same tractions the tax collected @ 28 % instead of 18%, some of the transactions
Like freight charges etc were not supported by any documentary proof debited in P&L accounts, also no supporting evidence by petitioner that tax has been paid under RCM u/s 9 of SGST Act and under section 5 of IGST Act.
Further assessee was directed to furnish reponse within 15 days.
On 12th Dec 2019, the assessment notice was issued to petitioner summarising 10 defects and mentioning penalty under section 74 and section 125 of GST. The petitioner was given time to submit response within 7 days from this notice
The assessee on 6th Jan 2020 was also called upon for personal by serving notice on 2nd Jan 2020. Due to voluminous details assessee requested for 30 days time and submitted all replies on defects dated 20th Jan 2020 with detailed objection to each defects mentioned in Pre assessment notice.
Without considering the objects and giving opportunity of being heard the respondent levied penalty of evasion of tax dtd 7th Feb 2020.
The learned counsel of petitioner submitted that its a ex facie and illegal assessment order by respondent and invited attention on case SRC Projects P Ltd Vs Comm. Of Commercial Tax, Chennai 2010, and Mariamma Fireworks Vs Commercial Tax deptt. 2011, wherein court held that before any assessment order the department is ought to give an fair and proper opportunity of being heard.
Section 75 & Section 125 - COURT HELD
Hence this court dtd. 23.04.2021 held that without application of mind the department passed the final assessment order without giving an opportunity of being heard to assessee.
All the impugned order passed by respondent within this matter is set aside and orders to start proceeding as afresh after giving proper opportunity of being heard to petitioner within four weeks from this order.
Section 75 & Section 125 - ANALYSIS OF THE JUDGEMENT
We have seen in this case that before passing any final pre-assessment order the department shall be liable to apparently application of mind and bound to given fair opportunity of being heard to assesee and should analyse and consider the facts submitted as an objection by the assessee as consistent with the provisions of this Act.
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