Tvl. Podhigai Motors vs. The Assistant Commissioner (St)

Facts

The petitioner, Tvl.Podhigai Motors, is challenging an order dated 26.03.2024 passed by the respondent, The Assistant Commissioner (ST). This order was passed under Section 161 of the TNGST Act, 2017, following an earlier assessment order dated 29.12.2023 for the period 2017-18. The petitioner had filed a reply to the show cause notice preceding the assessment order. The petitioner contends that the assessment order contained mistakes, prompting them to file an application for rectification under Section 161 of the TNGST Act, 2017. The petitioner's primary grievance is that the impugned order dated 26.03.2024, which dealt with their rectification application, was passed without providing them an opportunity to be heard, thus violating the principles of natural justice.

Held

The Court held that the impugned order dated 26.03.2024, passed by the respondent under Section 161 of the TNGST Act, 2017, was passed without hearing the petitioner, thereby violating the principles of natural justice. The Court found the respondent's argument that Section 161 of the TNGST Act, 2017, does not contemplate a hearing to be untenable, as the principles of natural justice are inherent in all proceedings under both the TNGST Act, 2017, and the CGST Act, 2017. Consequently, the Court quashed the impugned order. The case was remitted back to the respondent to pass fresh orders on merits after providing the petitioner with an opportunity to be heard. The respondent is expected to dispose of the rectification application within three months from the date of receipt of a copy of this order.

Key Issues

1. Whether the impugned order dated 26.03.2024, passed under Section 161 of the TNGST Act, 2017, is liable to be quashed for violation of the principles of natural justice by not hearing the petitioner. The petitioner argued that the impugned order, which was passed on their application for rectification of an earlier assessment order, was passed without affording them a personal hearing. They contended that this failure to provide an opportunity to be heard constitutes a violation of the fundamental principles of natural justice, rendering the order illegal. The petitioner relied on the inherent principles of natural justice being applicable to all proceedings under tax enactments. The respondent, represented by the Additional Government Pleader, argued that Section 161 of the TNGST Act, 2017, does not contemplate a hearing in such circumstances. However, the Court noted that the principles of natural justice are inbuilt in all proceedings under the TNGST Act, 2017, and the CGST Act, 2017.