V M and Co. Vs. The State Tax Officer – Madras High Court

(2024) taxcode.in 658 HC

IN THE HIGH COURT OF MADRAS

V M and Co.
v.
The State Tax Officer

W.P.(MD) No. 25760 of 2024
Decided on 25-Oct-24

 Mr. Justice Mohammed Shaffiq

Add. Info:

For Appellant(s): Mr. Raja. Karthikeyan

For Respondent(s): Mr. J.K. Jayaselan

Order

This Writ Petition has been filed, challenging the order, dated 12.07.2024, passed by the respondent, on the premise that the same has been made in violation of principles of natural justice, non-application of mind to the material on record, and also that is a non-speaking order.

2. The petitioner is engaged in execution of works contract. It is submitted that some of the works have been executed during the VAT regime and are stated to be subject to tax under the GST Act. Detailed replies have been filed by the petitioner in response to Form GST-DRC01A, dated 02.04.2024, whereby it was explained that the proposal to treat a sum of Rs. 42.86 crores as suppression was contrary to the facts inasmuch as out of the total receipts for the year 2017-2018 of Rs.48.10 crores, Rs.44.96 crores have been disclosed under the VAT regime and the sums received in respect of the works executed under the GST regime were only to the extent of Rs.3.35 crores and in respect of the above consideration, taxes have also been duly discharged under the GST. It may be relevant to record the following reply of the petitioner :

3. It is submitted that if the Assessing Officer had taken into account the reply and also the details which were furnished along with the reply, it would have been evident that the proposals were grossly erroneous. Instead, the Assessing Officer proceeded to reject the reply/contention of the appellant, by merely stating that the reply was not convincing. The relevant portion of the impugned order is extracted hereunder :

”The reply is not convincing and is not acceptable since they are not supported with valid documentary evidences. Hence, they are overruled since they are not having any valid records for production before the Assessing Officer for verification.”

It is thus submitted that the impugned order is non-speaking.

4. It is trite law that when any quasi-judicial order, which results in adverse consequences, must be made in compliance with the principles of natural justice. Reasoning is the heart-beat of every conclusion, absence of reason would vitiate the proceedings.

5. In the case on hand, the impugned order does not reflect any reasoning. What is stated therein is that the reply is not acceptable and documents are not filed. The Assessing Officer has not dealt with the objections of the petitioner at all.

6. In view thereof, this Court is of the view that the impugned order suffers from the vice of being a non-speaking order and thus violates principles of natural justice.

7. At this juncture, learned counsel for the respondent would submit that the respondent may be given liberty to re-do the assessment, after granting the petitioner another opportunity.

8. Accordingly, the impugned order is set aside. It is open for the respondent to proceed with the matter in accordance with law. It is also open for the petitioner to treat the Assessment Order as Show Cause Notice and submit their objections within a period of two weeks from the date of receipt of this order and, thereafter, appropriate orders will be passed by the respondent in accordance with law, after affording the petitioner an opportunity of hearing. It is also open for the petitioner to raise all objections, that may be available to them, before the authority.

9. Writ Petition is allowed accordingly. No costs. Consequently, the connected W.M.P.(MD) No.21824 of 2024 is closed.

25.10.2024

MOHAMMED SHAFFIQ, J.

Original judgment copy is available here.