Tvl. Viveka Essence Mart vs The Deputy State Tax Officer-II, Chennai

show-cause notice under Section 73 of the Tax Act. The petitioner contends that the assessment order is invalid and unsustainable due to various procedural irregularities and substantive errors. Firstly, they argue that the notice issued under Section 73 was defective as it failed to specify the exact grounds for initiating the audit. Additionally, the petitioner claims that they were not provided with adequate opportunity to present their case and were denied natural justice during the audit process. Furthermore, they contest the assessment order’s findings, alleging that it misinterpreted crucial facts and applicable legal provisions. The petitioner asserts that the assessing officer overlooked relevant evidence and failed to consider explanations provided by them, resulting in an erroneous assessment. They also challenge the assessment order on grounds of violation of principles of fairness and equity. The petitioner seeks to have the assessment order quashed and set aside, and requests for a fair reassessment of their tax liability for the 2017-18 assessment period. They argue that the principles of natural justice must be upheld, and procedural fairness must be ensured in all tax proceedings. The petitioner emphasizes the importance of a transparent and unbiased assessment process in maintaining the integrity of the tax system.

I hope this letter finds you well. I am writing to bring to your attention certain discrepancies highlighted in the assessment order dated [date], which have been challenged by [Petitioner’s Name]. The issues primarily revolve around the treatment of purchase turnover within the framework of the applicable GST laws.

Upon review of the impugned assessment order and subsequent discussions with learned senior counsel representing the petitioner, it has come to our attention that there exists a notable discrepancy (referred to as Discrepancy 15) concerning the purchase turnover vis-à-vis the turnover reported in the petitioner’s GST returns and their profit and loss account.

Learned senior counsel has astutely pointed out that the GST laws in question were enforced as of 01.07.2017. Given that the financial year under consideration spans from 01.04.2017 to 31.03.2018, it is imperative to exclude both sales and purchase turnovers pertaining to the period 01.04.2017 to 30.06.2017 from the assessment.

Regarding the sales turnover, it has been acknowledged that the assessing officer duly recognized the necessity for exclusion and appropriately omitted the sales turnover for the aforementioned period from the assessment. However, a discrepancy arises in the treatment of purchase turnover for the same period.

The petitioner contends that the purchase turnover for the period in question has not been similarly excluded from the assessment, despite the analogous requirement under the GST laws. This inconsistency in treatment has led to an erroneous assessment of the petitioner’s liabilities.

In light of the above, I hereby issue this summary intimation and show cause notice, requiring your prompt attention and response. You are hereby requested to provide clarification and justification for the apparent disparity in treatment concerning the exclusion of purchase turnover for the period 01.04.2017 to 30.06.2017, as per the provisions of the relevant GST laws.

Failure to provide a satisfactory explanation within the stipulated timeframe may result in further legal proceedings and actions.

The petitioner in this case raised objections regarding the computation of their alleged tax liability, highlighting discrepancies between different tax returns (specifically GSTR-1 and GSTR-3B). They argued that while their explanations led to the dropping of certain tax liabilities, those liabilities still appeared in the revenue abstract, indicating an inconsistency in the order. Additionally, they pointed out that liabilities regarding reverse charge mechanism (RCM) on inward supplies were dropped but still reflected in the revenue abstract, further questioning the coherence of the decision.

In response, Mr. T.N.C. Kaushik, representing the government, acknowledged receipt of the notice and argued that the principles of natural justice were upheld throughout the proceedings, with the petitioner being given a fair opportunity to present their case. He suggested that since due process was followed, the court should refrain from exercising discretionary jurisdiction, and instead, the petitioner should pursue available statutory remedies.