The Hon'ble High Court of Madras in New Grace Computers v. State Tax Officer W.P. (MD) NOS. 11638 & 11626 OF 2024 dated June 4, 2024 set aside the orders confirming GST demand and remitted the matter for fresh consideration, as the assessee, being a small operator, failed to notice the show cause notices uploaded on the web portal.
Facts of the Case:
New Grace Computers, the petitioner, challenged orders dated October 17, 2023 and November 8, 2023 passed under Section 73 of the Tamil Nadu Goods and Services Tax Act, 2017 for the assessment years 2017-18 and 2018-19.
The impugned orders confirmed demands of Rs. 8,10,414 and Rs. 3,31,382 towards IGST, CGST, and SGST reversal along with interest for the periods 2017-18 and 2018-19, respectively.
The petitioner contended that both the impugned orders and the preceding notices were not noticed by them as they were uploaded on the web portal. Being a small operator engaged in selling computers, the petitioner claimed they do not log into the web portal daily to check for orders or notices. Therefore, they sought an opportunity to be heard before the State Tax Officer (FAC), Nagercoil-1 Assessment Circle, Nagercoil.
The respondent argued that the writ petitions were filed long after the impugned orders and should be dismissed due to laches, as the limitation period for filing statutory appeals before the Appellate Commissioner under Section 107 of the TNGST Act 2017 had expired.
Held by the Court:
The Hon'ble High Court of Madras in W.P. (MD) NOS. 11638 & 11626 OF 2024 held that:
Court observed that the petitioner, being a small operator, faced challenges in regularly monitoring the web portal for notices and orders. It held that this circumstance warranted consideration and opined that the petitioner should be given an opportunity to present their case before the tax authorities.
Court held that the impugned orders should be quashed and treated as addendums to the show cause notices dated July 22, 2023. It directed the petitioner to deposit 10% of the disputed tax amount through the electronic cash register within 30 days of receiving a copy of the order. The Court further held that the petitioner must file a reply to the show cause notice within the same 30-day period.
Court opined that the first respondent should pass fresh orders on merits and in accordance with law after hearing the petitioner. It directed that this process should be completed as expeditiously as possible, preferably within a period of three months.
Court held that the writ petitions should be disposed of with these directions, and no costs were to be awarded. In doing so, the Court balanced the need for tax compliance with the practical challenges faced by small businesses in the digital era, ensuring that the petitioner's right to be heard was preserved while also maintaining the integrity of the tax assessment process.
Relevant Sections:
- "Section 73" of the Central Goods and Services Tax Act, 2017/Tamil Nadu Goods and Services Tax Act, 2017
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