Kathiravan vs. The Commissioner Of State Tax

Facts

The petitioner, Kathiravan, filed a writ petition challenging two orders dated 08.01.2024 and 29.04.2024, passed by the State Tax Officer, Woraiyur Assessment Circle, under Section 74 of the TNGST/CGST Act, 2017. These orders pertained to the tax periods 2017-18 and 2018-19, demanding sums of Rs.18,74,742/- and Rs.9,40,694/- respectively. The petitioner contended that upon receiving the show cause notices, he filed his reply in person, not through the portal. Consequently, the impugned orders were passed without providing a personal hearing, violating principles of natural justice. The petitioner also stated that he had paid 25% of the disputed tax amount as per a prior court direction.

Held

The Court held that the impugned assessment orders were passed without affording an opportunity of personal hearing to the petitioner, which is a violation of the principles of natural justice. The Court noted that the petitioner had submitted a reply in person, even though it was not uploaded on the portal. The authority's reliance on the absence of a portal-filed reply to deny a personal hearing was deemed incorrect. The Court also acknowledged that the petitioner had paid 25% of the disputed tax amount as directed. Consequently, the Court set aside the impugned orders dated 08.01.2024 and 29.04.2024 and remanded the matter back to the State Tax Officer for fresh consideration. The petitioner was directed to file their reply/objection within two weeks, and the State Tax Officer was to consider it, issue a 14-day clear notice for personal hearing, and then pass fresh orders on merits. The ratio decidendi is that a taxpayer must be afforded a personal hearing before an adverse order is passed, especially when a reply has been submitted, irrespective of the mode of submission, and failure to do so vitiates the order.

Key Issues

1. Whether the impugned orders passed by the State Tax Officer are liable to be set aside for violation of the principles of natural justice, specifically for not providing an opportunity of personal hearing to the petitioner, as argued by the petitioner? 2. Whether the impugned orders are valid despite the petitioner submitting a reply in person and not through the GST portal, as contended by the petitioner? Petitioner's Arguments: The petitioner argued that the impugned orders were passed without affording a proper opportunity of personal hearing. He submitted his reply in person, but the authority proceeded to pass orders stating no reply was filed through the portal. He relied on the principle of natural justice. He also highlighted that he had complied with the court's direction to pay 25% of the disputed tax amount. Respondents' Arguments: The respondents, through the learned Additional Government Pleader, fairly admitted that no opportunity of personal hearing was provided to the petitioner prior to the passing of the impugned orders. They requested the court to remit the matter back to the respondent for fresh consideration.