2024 (7) TMI 1032 - HC - GST

Cancellation of registration of petitioner - non-service of notice - non-furnishing of the report of the Additional Commissioner of Commercial Taxes (Enforcement), Bangalore, Karnataka - violation of principles of natural justice - HELD THAT - A perusal of the objections raised by the petitioner would show that the said objections are extracts of various Judgments and a statement that all necessary documents are available with the petitioner. In such circumstances, the observations of the assessing officer made above are sufficient response to the objections raised by the petitioner. Similarly, the absence of the petitioner at the address available with the assessing office cannot amount to non-service of notice on the petitioner. On the question of non-furnishing of the report of the Additional Commissioner of Commercial Taxes (Enforcement), Bangalore, Karnataka, the Judgment of Division Bench of the Common Andhra Pradesh High Court in the case of Sri Nallana Sambasiva Rao Vs. State of Andhra Pradesh 2015 (2) TMI 1377 - TELANGANA HIGH COURT followed, which had held that an assessment based on material and reports submitted by Regional Vigilance and Enforcement Authority can be upheld only when such reports are supplied to the assessee along with the notice of the assessment before any assessment order is passed. As the said report has not been furnished, the subsequent assessment order which levied tax penalty and interest would have to be set aside. This Writ Petition is allowed setting aside the impugned order of assessment passed by the 1st respondent and remanding the matter back to the 1st respondent to take up the assessment proceedings after furnishing the copy of the report of the Additional Commissioner of Commercial Taxes (Enforcement), Bangalore, Karnataka and after giving a opportunity of personal hearing to the petitioner. Petition allowed by way of remand.

Summary

Issues:
1. Assessment order based on fraudulent input tax credit availed.
2. Rejection of objections by the petitioner.
3. Non-furnishing of the report of the Additional Commissioner of Commercial Taxes.
4. Lack of opportunity for a personal hearing to the petitioner.

Analysis:
1. The petitioner, a registered dealer under the Goods and Service Tax Act, faced a show-cause notice regarding fraudulent input tax credit availed. The notice demanded payment of the wrongly availed amount, leading to an assessment order imposing tax, penalty, and interest. The petitioner challenged this order in a Writ Petition, citing various grounds of contention.

2. The petitioner's counsel argued that the assessment order failed to consider the objections raised, violating principles of natural justice. The petitioner also highlighted the non-furnishing of a crucial report requested in the objections. Moreover, the absence of a personal hearing opportunity was emphasized, as required by section 75(4) of the GST Act.

3. The Assistant Government Pleader defended the assessing officer's actions, stating that the objections lacked substance and were merely references to legal judgments. Regarding the personal hearing notice, it was sent to the petitioner's address but returned undelivered. The non-furnishing of the report was justified by suggesting the petitioner should have personally approached for document inspection.

4. The High Court found merit in the petitioner's argument regarding the non-furnishing of the report, citing a previous judgment requiring such reports to be provided before passing an assessment order. Consequently, the assessment order was set aside, and the matter was remanded for reassessment after furnishing the report and granting a personal hearing to the petitioner. The Court ruled in favor of the petitioner, emphasizing the importance of due process in tax assessments.