2023 (11) TMI 772 - HC - GST

Validity of assessment u/s 74 - Ascertaining Tax liability - Violation of principles of natural justice - failure to consider the reply filed by the petitioner - HELD THAT - In the present case due to the failure on the part of the respondent/Assessing Officer to consider the reply filed by the petitioner and deal with the same while passing the impugned order by which the petitioner will deprive of their right to defend before the Assessing Authority if the matter is remanded to the Appellate Authority. In the present case the respondent/Assessing Officer admittedly has failed to consider the reply/objections made by the petitioner pursuant to the show cause notice and passed a non-speaking order. The learned counsel also brought to the notice of this Court certain paragraphs mentioned in the show cause notice were re-produced in the impugned order. Therefore failure on the part of the respondent/Assessing Officer to address the reply/objections of the petitioner/assessee by a speaking order would vitiate the impugned proceedings. Since the reply/objections made by the petitioner pursuant to the show cause notice remained undecided this Court feels that the petitioner is entitled to have a considered opinion of the Assessing Officer after taking into consideration the reply filed by the petitioner. Thus this Court is inclined to set-aside the impugned order and remit the matter back for re-consideration. Accordingly the Assessing Officer is directed to pass a detailed order after taking into consideration the reply filed by the petitioner. The matter is remitted back to the respondent for reconsideration of its order taking into consideration the reply filed by the petitioner dated 17.1.2022. Needless to say that principles of natural justice shall be followed - Petition allowed by way of remand.

Summary

Issues involved:
The issues involved in this case are the challenge to an impugned order passed by the respondent regarding tax liability under the Tamil Nadu Goods and Services Act, 2017, specifically related to reconciliation of returns, ITC verification, and the failure to consider the petitioner's reply before passing a non-speaking order.

Details of the Judgment:

*Issue 1: Failure to Consider Petitioner's Reply*
The petitioner, engaged in the trading of garments, challenged an order by the respondent regarding tax liability under the Act. Despite the petitioner filing a reply and the respondent recording it during a personal hearing, the impugned order was issued without considering the petitioner's response, leading to the filing of the Writ Petition. The Court noted that the impugned order was non-speaking and observed that the Appellate Authority could provide a detailed order after considering the petitioner's reply.

*Issue 2: Role of the Appellate Authority*
The Court considered that while the Appellate Authority could play a role similar to the Assessing Officer in reviewing the matter, it could not remand the case for fresh consideration. The petitioner was entitled to have two well-considered opinions from both the Assessing Officer and the Appellate Authority, emphasizing the importance of the Assessing Officer considering the petitioner's reply before passing an order.

*Issue 3: Duties of the Assessing Officer*
The Court outlined the duties of the Assessing Officer before passing an assessment order, emphasizing the need for providing sufficient time for the assessee to respond, conducting a full-fledged inquiry, and passing a speaking order with reasons for rejecting any objections raised by the assessee. Failure to follow these aspects could lead to appeals and potential revenue loss for the Department.

*Conclusion*
The Court set aside the impugned order and remitted the matter back to the Assessing Officer for reconsideration, directing a detailed order after taking into account the petitioner's reply. The judgment emphasized the importance of following principles of natural justice in such proceedings and highlighted the necessity of Assessing Officers passing speaking orders to safeguard the interests of both the assessee and the Revenue.