Tvl. Uthirapathi Contractor vs. The State Tax Officer (Inspection-I)

Facts

The petitioner, Tvl. Uthirapathi Contractor, represented by its Proprietor P. Uthirapathi, filed a writ petition challenging an order passed by the Respondent, The State Tax Officer (Inspection-I), for the tax period 2020-21, dated 05.09.2024. The petitioner sought to quash this order, alleging it was illegal and passed in gross violation of the principles of natural justice. The petitioner also prayed for a direction to the Respondent to re-do the assessment afresh after providing an opportunity for a personal hearing as per the provisions of the GST Act, 2017. The Respondent's counsel submitted that the petitioner had paid the tax amount pursuant to a DRC-01 notice and the present show cause notice was issued only for the collection of interest and penalty.

Held

The Court held that the impugned assessment order is set aside. The reasoning provided is that while the Respondent's counsel indicated that the tax amount was paid pursuant to a DRC-01 notice and the current show cause notice was for interest and penalty, this information was only made available on the portal. The Court found that the issue raised in the writ petition was covered by a previous order of the same Court in W.P.(MD) No.26481 of 2024 etc., batch dated 06.01.2025. Consequently, the Court directed the petitioner to submit their reply within two weeks of receiving the order. Thereafter, the Respondent is to pass orders on merits and in accordance with law after providing an opportunity of hearing to the petitioner. Any bank attachment made in relation to this matter is also to be raised. The ratio decidendi is that principles of natural justice, including the right to a personal hearing, must be adhered to, and if not, such orders are liable to be set aside and remanded for fresh consideration.

Key Issues

1. Whether the impugned order dated 05.09.2024, passed by the Respondent, is illegal and in gross violation of the principles of natural justice, particularly concerning the opportunity of personal hearing, as per the provisions of the GST Act, 2017? Petitioner's Contention: The petitioner argued that the assessment order was passed in gross violation of the principles of natural justice, specifically by denying an opportunity for a personal hearing. They sought to quash the order and have the assessment redone with a proper hearing. Respondent's Contention: The Respondent's counsel submitted that the petitioner had already paid the tax amount pursuant to a DRC-01 notice, and the subsequent show cause notice was only for the collection of interest and penalty. The Respondent did not explicitly argue against the petitioner's claim of violation of natural justice but indicated the nature of the subsequent proceedings.