A rectification application should be disposed of before proceeding with a writ petition.

Assessment Order Challenged; Rectification Application to be Considered

Issue: Whether an assessment order passed under Section 73 of the CGST Act, 2017, should be upheld when the assessee has filed a pending rectification application under Section 161 of the same Act.

Facts:

The petitioner-assessee, engaged in manufacturing industrial components, filed returns and paid taxes for 2017-18.
A mismatch was found between GSTR-1 and GSTR-3B.
Notices were issued in Form DRC-01A under Section 73, and a personal hearing was offered.
The petitioner neither filed a reply nor paid the tax amount.
An assessment order dated December 28, 2023, was passed, confirming the proposal.
The petitioner filed a rectification application on February 23, 2024, which remained pending.
An appeal filed was rejected as time-barred.
The petitioner filed a writ petition challenging the assessment order.

Decision:

The court held that since the rectification application was pending, the writ petition was disposed of.
The court directed the respondent to consider and dispose of the rectification application.

Key Takeaways:

Pending Rectification: When a rectification application under Section 161 is pending, it should be considered before challenging the assessment order in a writ petition.
Opportunity for Rectification: The court emphasized the importance of allowing the assessing authority to rectify any errors in the assessment order.
Procedural Compliance: The court’s decision highlights the need for assessees to follow procedural requirements, such as filing replies and paying taxes, but also recognizes the right to seek rectification.
Time-Barred Appeal: The rejection of the appeal as time-barred underscores the importance of adhering to statutory timelines.
Focus on Rectification: The court prioritized the rectification process, recognizing that it might resolve the dispute without further litigation.
The court is taking a practical approach, by allowing the rectification process to take place, instead of immediately addressing the assessment order.

HIGH COURT OF MADRAS

Sri Vishnu Industries

Deputy State Tax Officer

J. SATHYA NARAYANA PRASAD, J.

Writ Petition No. 36793 of 2024
W.M.P. Nos. 39707 and 39708 of 2024

DECEMBER 10, 2024

M/s. V. Vijayalakshmi, for the Petitioner., M/s. Amirta Dinakaran, Government Adv. for the Respondent.

ORDER

1. The present writ petition is filed challenging the impugned order Reference No.ZD3312232525001/2017-18 dated 28.12.2023 passed by the respondent.

2. It is submitted by the learned counsel for the petitioner that the petitioner is engaged in the business of manufacturing of Industrial components and allied and it is registered under the GST Act. During the relevant period of 2017-18, the petitioner has filed the returns and paid appropriate taxes. However, during the scrutiny of the petitioner’s return, it was found that there was a mismatch between GSTR 1 and GSTR 3B.

3. Subsequently, a notice was issued to the petitioner in Form DRC-01A on 15.09.2023, followed by a notice in DRC-01A under Section 73(1) of the TNGST Act, 2017 and personal hearing was offered on 29.10.2023 followed by reminder on 27.11.2023. However, the petitioner had neither filed its reply nor paid the tax amount. Hence, the impugned order came to be passed, confirming the proposal. Aggrieved by the same, the petitioner preferred an application for rectification on 23.02.2024 and the said application is still pending before the concerned authority.

4 The learned counsel appearing for the petitioner submitted that the petitioner has remitted 98% of the disputed tax on 26.12.2019. Apart from that, the petitioner has already been deposited 10% of the disputed tax while preferring the appeal before the Deputy Commissioner, Chennai on 28.05.2024 and the same was rejected on the ground that the same is beyond the statutory period. The learned counsel for the petitioner further submitted that the petitioner totally 108% of the disputed tax has already been deposited. However, the said application for rectification filed by the petitioner dated 23.02.2024 is still pending before the concerned authority and the same is not disposed till date.

5. The learned Government Advocate (T) appearing for the respondent would submit that since the application for rectification filed by the petitioner dated 22.03.2024 is still pending, the same will be considered and disposed of in accordance with law.

6. Heard the arguments advanced by the learned counsel for the petitioner and the learned Government Advocate for the respondent and also perused the materials available on records.

7. In view of the above submissions made by the learned counsel on either side, the respondent is directed to consider the application for rectification filed by the petitioner dated 23.02.2024 and pass appropriate orders on merits and in accordance with law, within a period of three weeks from the date of receipt of a copy of this order.

8. This Writ Petition is disposed of with the aforesaid observation and direction. No costs. Consequently, connected miscellaneous petitions are closed.