Thirugnanam Chandraprakash 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 impugned order was passed without granting the mandatory personal hearing, which is required when an authority contemplates an adverse decision after considering the objections. The Court relied on its previous decision in W.P(MD)Nos.8133 of 2020, etc., batch, which clarified that a personal hearing must be provided after the authority prima facie considers the explanation and contemplates an adverse decision. Consequently, the Court found it unnecessary to examine other aspects raised by the petitioner. The impugned order was set aside. The Respondent was directed to grant a personal hearing to the petitioner within four weeks of receiving a copy of the order and thereafter pass orders on merits and in accordance with law.

Facts

The petitioner, Thirugnanam Chandraprakash, proprietor of Tvl.Sree Easwaren Tools and Services, filed a writ petition challenging an order dated 05.02.2020 passed by the State Tax Officer. This order reversed input tax credit wrongly availed and utilized under Section 74 of the Tamil Nadu Goods and Services Tax Act, 2017. The petitioner also sought to quash the said order and direct the respondent to accept a manually filed TRAN-1 dated 13.12.2019, allowing the transitional input tax credit claimed therein. The impugned order was passed by the Respondent authority.

Key Issues

1. Whether the impugned order dated 05.02.2020, passed by the Respondent, is vitiated for non-compliance with the mandatory procedural requirement of a personal hearing under Section 75(4) of the Tamil Nadu Goods and Services Tax Act, 2017, when an adverse decision was contemplated against the petitioner? Petitioner's arguments: The petitioner contended that the impugned proceedings were made without adhering to the procedure laid down in Section 75(4) of the Tamil Nadu Goods and Services Tax Act, 2017. This section mandates a personal hearing if an adverse decision is contemplated. The petitioner argued that no personal hearing was granted after the receipt of their objections, rendering the order non-compliant. They relied on a previous order of the same High 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 arguments: The judgment does not record any arguments made by the Respondent.