Tvl Kajah Enterprises (P) LTD vs. The Assistant Commissioner (Inspection) (St Iu)

Facts

The petitioner, Tvl.Kajah Enterprises (P) Ltd., filed a Rectification Application on March 11, 2025, challenging an Order of Assessment dated January 6, 2025, for the assessment year 2017-18. The respondent, The Assistant Commissioner (Inspection) (ST-IU), rejected this application via an order dated March 28, 2025. The petitioner contended that the respondent rejected the application without assigning reasons and without affording an opportunity of hearing. The respondent argued that reasons are not required for rejection if no apparent error is found, and the proviso for a hearing under Section 161 of the TNGST Act only applies when the authority initiates rectification suo motu and it is detrimental to the assessee. The petitioner sought to quash the impugned order and direct the respondent to consider their rectification application after providing a hearing.

Held

The Court held that the impugned order dated March 28, 2025, rejecting the petitioner's Rectification Application is liable to be set aside. The Court found that the order did not provide any reasoning as to why there was no error apparent on the face of the record, which is a prerequisite for rejecting such an application. Furthermore, the Court disagreed with the respondent's contention that a personal hearing is not required when an application is made at the instance of the assessee. The Court emphasized that the third proviso to Section 161 of the CGST Act, incorporating principles of natural justice, contemplates an opportunity of hearing when an order is made adverse to the assessee. Even when a rectification application is rejected without considering the reasons provided or giving reasons for rejection, it is imperative that the assessee be put on notice. Therefore, the impugned order was set aside, and the Rectification Application was remanded to the respondent for fresh consideration after affording the petitioner an opportunity of hearing.

Key Issues

1. Whether the respondent's order dated March 28, 2025, rejecting the petitioner's Rectification Application under Section 161 of the TNGST Act is liable to be set aside for want of reasons and opportunity of hearing? The petitioner argued that the respondent failed to provide reasons for rejecting the rectification application and did not grant an opportunity of hearing, which is contrary to principles of natural justice and the provisions of Section 161. The petitioner relied on the general principles of natural justice and the specific proviso to Section 161. The respondent contended that reasons are not necessary for rejection if no apparent error is found. They further argued that the proviso to Section 161, mandating an opportunity of hearing, is applicable only when the Assessing Officer initiates rectification suo motu and such rectification is detrimental to the assessee. In this case, the application was made by the petitioner, and no error apparent was indicated, thus no hearing was required.