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 dated 05.09.2024 passed by the State Tax Officer (Inspection-I). The order pertains to the tax period 2023-24. The petitioner sought to quash the impugned order on grounds of illegality and gross violation of the principles of natural justice, requesting a fresh assessment after being provided an opportunity for a personal hearing. The respondent is the State Tax Officer (Inspection-I). The respondent's counsel submitted that the petitioner had paid the tax amount pursuant to a DRC-01 notice, and the current show cause notice was only for interest and penalty.

Held

The Court held that the impugned assessment order is set aside. The reasoning provided is that while the respondent submitted that the tax amount was paid pursuant to a DRC-01 notice and the current show cause notice was only 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 a batch of cases (W.P.(MD) No.26481 of 2024 etc., dated 06.01.2025). The ratio decidendi appears to be that where a taxpayer has not been afforded a proper opportunity of hearing, especially when the tax amount has already been paid, and the proceedings relate to interest and penalty, the principles of natural justice must be upheld. The operative direction is that the petitioner is to submit a reply within two weeks of receiving the order, and thereafter, the respondent must pass orders on merits after providing an opportunity of hearing. Any bank attachment made is also to be raised. The Court expressly left undecided any specific assessment of the merits of the interest and penalty calculation.

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, warranting its quashment? 2. Whether the Petitioner is entitled to a fresh assessment after being provided an opportunity of personal hearing as per the provisions of the GST Act, 2017? Petitioner's Contention: The petitioner argued that the impugned order was illegal and passed in gross violation of the principles of natural justice, specifically by denying an opportunity for a personal hearing. The petitioner sought to quash the order and direct a fresh assessment with a proper hearing. Respondent's Contention: The learned Additional Government Pleader submitted that the petitioner had already paid the tax amount as per the DRC-01 notice, and the present show cause notice was issued solely for the collection of interest and penalty. The respondent did not explicitly argue against the violation of natural justice or the need for a hearing.