Balasubramanian Deepalakshmi vs. The State Tax Officer

Held

The Court held that there were merits in the petitioner's submission regarding the non-compliance with Section 75(4) of the Tamil Nadu Goods and Services Tax Act, 2017. The Court found that the Act mandates an opportunity of hearing where a request is received or where an adverse decision is contemplated. The Court noted that issuing a personal hearing notice prior to the receipt of an explanation, and not granting a hearing after considering objections and contemplating an adverse decision, does not constitute compliance with the statutory requirements. Therefore, the impugned order was set aside. The Court directed the Respondent to grant a personal hearing to the Petitioner within four weeks from the date of receipt of a copy of the order and thereafter, pass orders on merits and in accordance with law. The Court did not examine other aspects raised by the petitioner, deeming it unnecessary in view of the procedural defect.

Facts

The petitioner, Balasubramanian Deppalakshmi, proprietor of Tvl. Akshayaa Tools and Services, filed a writ petition challenging an order dated January 23, 2020, issued by the State Tax Officer, Gandhimarket Assessment Circle, Trichy. This order reversed wrongly availed and utilized transitional Input Tax Credit under Section 74 of the Tamil Nadu Goods and Services Tax Act, 2017. The petitioner sought to quash this order and direct the respondent to accept a manually filed TRAN-1 dated December 13, 2019, allowing the transitional input tax credit claimed therein. The procedural history indicates the petitioner raised objections to the impugned order.

Key Issues

1. Whether the impugned order dated 23.01.2020, passed by the Respondent under Section 74 of the Tamil Nadu Goods and Services Tax Act, 2017, is liable to be quashed for non-compliance with the mandatory procedural requirement of a personal hearing as stipulated under Section 75(4) of the said Act, especially when an adverse decision was contemplated against the petitioner? Petitioner's Contention: The petitioner argued that the impugned proceedings were made without adhering to the procedure under Section 75(4) of the Tamil Nadu Goods and Services Tax Act, 2017, which mandates a personal hearing when an adverse decision is contemplated. The petitioner contended that no personal hearing was granted after the receipt of their objections, rendering the order invalid. Reliance was placed on a previous order of this Court in W.P(MD)Nos.8133 of 2020, etc., batch, dated 31.08.2020, which interpreted the scope of Section 75(4). Respondent's Contention: The judgment does not record any specific arguments made by the respondent.