Madras High Court Directs Tax Authority To Reconsider Representation On Merit

Madras High Court Directs Tax Authority To Reconsider Representation On Merit

The Court observed that the Assistant Commissioner had not decided any issues on merits nor undertake any adjudication about the disputed issues

The Madras High Court has directed the Assistant Commissioner to consider the representation submitted by a Petitioner against the interest on delayed payment of tax u/S 50 of the Central Goods and Services Tax Act, 2017.

The matter titled S R & Sons v Assistant Commissioner And Anr was placed before a single-judge court of Justice S.M. Subramaniam in the High Court of Madras.

The factual background of the case was that the Petitioner – Assessee was a partnership firm involved in the manufacture of knitted and crocheted fabrics. The Petitioner submitted that interest on delayed payment of tax shall be charged u/S 50 of the Central Goods and Services Tax Act, 2017 but the Petitioner had raised certain valid grounds, which the Respondent – Assistant Commissioner failed to adjudicate on factual as well as the legal grounds. The Petitioner submitted that it had no serious grievance against the order but it had certain grievances as far as the interest portion was concerned for which it had made a representation before the authorities.

The Respondent contended that the writ petitions are liable to be rejected as it was an appealable order.

The Court after going through the order of the Respondent noted that the order did not decide any issues on merits nor undertake any adjudication with reference to the disputed issues. However, the Respondent had granted liberty to the Petitioner to prefer an appeal against the original order passed on 11 November 2020.

The Court made the following observation:

"When the Authorities Competent are empowered to decide the interest, which is in dispute, with reference to the provisions stated above and in the event of passing any order on merits, the aggrieved person would get an opportunity to further appeal under the provisions of the Act. Such an exercise has not been done by the Authority Competent and therefore, the petitioner is constrained to move the present writ petitions."

The Court noted that that the Petitioner had stated that it had no grievance against the original order dated 11 November 2020 and the grievance was only against the charging of interest under Section 50 of the Central Goods and Services Tax Act, 2017 for which a representation was made by the Petitioner. It observed that such representation was entertainable under the provisions of the Act and the Authorities Competent was duty-bound to dispose of the same on merits and in accordance with the law.

The Court, therefore, directed the Respondent to consider the representation submitted by the Petitioner and pass an order on merits and in accordance with law and by affording an opportunity to the Petitioner.