Sri Kumaran Steels Vs Deputy State Tax Officer- I (Madras High Court)
Introduction: The case of Sri Kumaran Steels vs. Deputy State Tax Officer before the Madras High Court concerns an order dated 14.08.2023, challenged due to the petitioner’s contention that their response to an intimation was disregarded. The petitioner, engaged in steel contracts, contests the validity of the order issued without consideration of their submissions.
Detailed Analysis:
1. Disregarded Response: The petitioner submitted a comprehensive response to an intimation dated 07.05.2023, providing evidence to support the genuineness of supplies received. However, the subsequent issuance of a show cause notice and the eventual order on 14.08.2023 disregarded this response, leading to the present legal challenge.
2. Contentions of the Petitioner: The petitioner’s counsel highlights the submission made on 07.05.2023, including proof of uploading attachments, to establish the movement of goods. Despite this, the respondent’s conclusion in the impugned order that no documents were furnished is contested as unsustainable.
3. Government’s Response: The government advocate acknowledges the issuance of the impugned order due to the petitioner’s failure to respond to the show cause notice. However, the discrepancy arises concerning the consideration of the petitioner’s earlier response and the evidence provided therein.
4. Unsustainable Conclusions: The court notes discrepancies between the respondent’s findings and the documents annexed to the petitioner’s reply to the intimation. The impugned order’s assertion of non-submission of documents contradicts the evidence provided, rendering its conclusions unsustainable.
Conclusion: The Madras High Court quashes the impugned order in the case of Sri Kumaran Steels vs. Deputy State Tax Officer and remands the matter for reconsideration. The petitioner is granted 15 days to file a reply to the show cause notice, annexing all relevant documents. The respondent is directed to afford a reasonable opportunity to the petitioner, including a personal hearing, before issuing a fresh order within two months. The judgment underscores the importance of considering submissions and evidence in tax assessments, ensuring procedural fairness in such matters.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
An order dated 14.08.2023 is assailed on the ground that the petitioner’s reply to the intimation dated 07.05.2023 was disregarded.
2. The petitioner deals in steel contracts. Upon examining returns filed by the petitioner, an intimation in Form GST DRC-01A was issued to the petitioner on 04.05.2023. The petitioner replied thereto on 07.05.2023 by annexing several documents to establish the genuineness of supplies received by the petitioner. Thereafter, a show cause notice dated 14.06.2023 was issued. The petitioner asserts that he was unaware of such show cause notice because it was uploaded in the “Additional Notices and Orders” tab on the GST portal. The impugned order was issued thereafter on 14.08.2023. After filing a rectification petition on 19.01.2024, the present writ petition was filed.
3. Learned counsel for the petitioner referred to the petitioner’s reply dated 07.05.2023, including proof of uploading of such reply along with attachments. By turning to the impugned order, she pointed out that the respondent concluded that the petitioner had not submitted documents to establish the movement of goods. In the face of documents attached to the petitioner’s reply to the intimation, she contended that such findings are unsustainable.
4. Mr. V. Prashanth Kiran, learned Government Advocate, accepts notice for the respondent. He points out that the impugned order was issued because the petitioner failed to reply to the show cause notice.
5. The reply dated 07.05.2023 of the petitioner is on record. In such reply, the petitioner refuted the liability and enclosed copies of the invoice, weighment slips, e-way bills, ledger copy and payment details relating to the relevant supplies. The petitioner also placed on record the evidence that the said reply was uploaded along with attachments. In the operative portion of the impugned order, it is recorded as under:
“The dealer had not furnished any documents and had failed to establish the movement of goods under Section 16(2)(b) for physical possession/actual receipt of goods. The following documents were not submitted to substantiate their claim of credit in legitimate manner.
Lorry receipts, Trip sheet, Toll payments
Stock inward and outward register for purchases and sales.
Section 155 of the TNGST Act clearly mandates, the burden of proof lies on such person to prove that he is eligible for the ITC under this Act. In this case, the dealer had failed to prove his eligibility for such input tax credit.”
In view of documents annexed to the petitioner’s reply to the intimation, the above conclusions are unsustainable.
6. For reasons set out above, the impugned order is quashed and the matter is remanded to the respondent for reconsideration. The petitioner is permitted to file a reply to the show cause notice dated 14.06.2023 within a period of 15 days from the date of receipt of a copy of this order by annexing all relevant documents once again. Upon receipt thereof, the respondent is directed to provide a reasonable opportunity to the petitioner, including a personal hearing, and thereafter issue a fresh order within a period of two months from the date of receipt of the petitioner’s reply.
7. The writ petition is disposed of on the above terms. There will be no order as to costs. Consequently, connected miscellaneous petition is closed.