C Balasubramanian vs. The State Tax Officer (St)

Held

The Court held that the ex parte order passed against the petitioner was in violation of the principles of natural justice. The Court acknowledged the petitioner's submission that he was unaware of the proceedings due to online notice service and the lack of a personal hearing. Following the submission of the learned Additional Government Pleader regarding a common practice in similar cases, the Court directed the petitioner to deposit 25% of the disputed tax amount through the electronic cash ledger within thirty days. Upon compliance, the attachment on the petitioner's Input Tax Credit (ITC) account would be raised, and the impugned order would stand quashed. The petitioner was then required to reply to the show cause notice within thirty days, after which the respondent would provide a personal hearing and pass a final order within two months. The Court also stipulated that if the petitioner failed to comply with the deposit and reply timelines, the benefit of this order would be automatically recalled, and the impugned order could be enforced.

Facts

The petitioner, C. Balasubramanian, a contractor, filed a writ petition challenging an ex parte order passed by the State Tax Officer (1st Respondent) for the tax period 2018-2019, dated 08.04.2024, and a consequential summary of order passed by the Commercial Tax Officer (2nd Respondent) in Form GST DRC-07, also dated 08.04.2024. The petitioner contended that the notice was served only through the online portal, and consequently, he was unaware of the proceedings. The impugned order was passed without providing the petitioner an opportunity for a personal hearing, violating the principles of natural justice.

Key Issues

1. Whether the ex parte order passed by the Respondent authorities for the tax period 2018-2019 is illegal, without jurisdiction, and in gross violation of the Principles of Natural Justice, particularly concerning the method of notice service and lack of personal hearing, as contemplated under the GST Act? Petitioner's Arguments: The petitioner argued that the ex parte order was passed without proper notice, as it was served only through the online portal, leading to his unawareness of the proceedings. He contended that this violated the principles of natural justice and that the assessment should be re-done after providing him with an opportunity for a personal hearing as per the GST Act provisions. Respondents' Arguments: The learned Additional Government Pleader submitted that in similar matters, reliefs were granted by directing the assessee to deposit 25% of the disputed tax amount.