2025 (7) TMI 1392 - HC - GST

Challenge to assessment orders passed u/s 73 of the Tamil Nadu Goods and Services Tax Act 2017 - petitioner had not participated in the proceedings - without complying with the time line prescribed in the order an assessment order came to be passed - HELD THAT - The case law settled in the context of service law cannot be imported for adjudication orders to be passed under the tax laws. No prejudice can be caused to the petitioner merely because there was a delay in passing the order within a period of six weeks stipulated vide order dated 16.04.2024. In any event petitioner challenged the order dated 10.04.2024 before the respondent by way of rectification under Section 161 of the Tamil Nadu Goods and Services Tax Act by filing an application on 10.03.2025. However it has been rejected vide order dated 11.04.2025. In view of the dismissal of the rectification application dated 10.03.2025 on 11.04.2025 it cannot be construed that the order dated 10.04.2024 is deemed to have merged with the order dated 11.04.2025 in terms of the decision of the Hon ble Supreme Court in the case of Kunhayammed and others Vs State of Kerala 2000 (7) TMI 67 - SUPREME COURT (LB) . However the pendency of rectification application will entitle the petitioner to invoke Section 14 of the Limitation Act 1963. Therefore liberty is granted to the petitioner not only to file an appeal against the order dated 11.04.2025 rejecting the request of the petitioner to rectify the order dated 10.04.2024 within a period of thirty days from the date of receipt of a copy of this order but also against order dated 10.04.2024 within such time. Petition dismissed.

Summary

ISSUES:

Whether an assessment order passed beyond the time frame fixed by the Court is deemed to have abated.Whether delay in passing an assessment order under the Tamil Nadu Goods and Services Tax Act, 2017 causes prejudice warranting quashing of the order.The scope and applicability of rectification under Section 161 of the Tamil Nadu Goods and Services Tax Act, 2017 against an assessment order.Whether a petitioner is entitled to file an appeal against an order rejecting a rectification application and/or the original assessment order.The effect of pendency and dismissal of a rectification application on limitation for filing an appeal under the Limitation Act, 1963.Whether coercive recovery proceedings can be initiated pending the filing of an appeal against the assessment order.

RULINGS / HOLDINGS:

The Court held that "No prejudice can be caused to the petitioner merely, because there was a delay in passing the order within a period of six weeks stipulated" and therefore the assessment order passed beyond the fixed timeline is not deemed to have abated.The rectification application filed under Section 161 was rightly rejected as "no case was made out for rectification," and such rejection does not merge the original order with the rectification order.The petitioner is entitled to file an appeal against both the order rejecting rectification and the original assessment order, with liberty granted to file within thirty days from the date of receipt of the Court's order.The pendency of the rectification application entitles the petitioner to invoke Section 14 of the Limitation Act, 1963, extending limitation for filing an appeal.The Court directed that "respondents are directed not to initiate any coercive steps to recover the tax confirmed" by the assessment order for a period of thirty days from the date of receipt of the Court's order.

RATIONALE:

The Court distinguished service law principles from tax law adjudication, emphasizing that delay in passing assessment orders under the Tamil Nadu Goods and Services Tax Act does not automatically invalidate such orders or cause prejudice.The legal framework applied includes Section 73 and Section 161 of the Tamil Nadu Goods and Services Tax Act, 2017, and Section 14 of the Limitation Act, 1963.The Court relied on the principle from the Supreme Court decision in Kunhayammed v. State of Kerala to clarify that dismissal of rectification does not merge the original order with the rectification order.The Court balanced the interests of tax administration and the petitioner's right to appeal by granting a limited period to file appeals and restraining coercive recovery measures during that period.