K.Muthusamy vs. The Deputy State Tax Officer -1

Held

The Court held that the impugned rectification orders passed under Section 161 of the GST Act, 2017, were liable to be set aside. The primary reason for this decision was the failure of the respondent authority to comply with the mandatory procedural requirement stipulated in Section 161, which mandates that if an order of rectification is made against an assessee, an opportunity of hearing must be provided to the assessee by the Assessing Officer. The Court found no evidence that such an opportunity of hearing was given to the petitioner in the present case. Consequently, the Court set aside the impugned orders and remitted the matter back to the respondent. The respondent was directed to provide an opportunity of hearing to the petitioner before passing any fresh order of rectification. The ratio decidendi is that compliance with the principles of natural justice, specifically the right to be heard, is a prerequisite for passing rectification orders under Section 161 of the GST Act, 2017.

Facts

The petitioner, K. Muthusamy, filed two writ petitions challenging rectification orders dated June 28, 2024, issued by the Deputy State Tax Officer-1, Karur. These orders were passed under Section 161 of the GST Act, 2017. The petitioner contended that the respondent authority failed to follow the mandatory provisions of Section 161, specifically by not issuing any notice to the petitioner or providing an opportunity of hearing before passing the rectification orders. The petitioner sought to quash these orders as being without jurisdiction and in violation of statutory provisions.

Key Issues

1. Whether the rectification orders passed by the respondent under Section 161 of the GST Act, 2017, are liable to be quashed for non-compliance with the mandatory procedural requirements of providing an opportunity of hearing to the assessee? Petitioner's arguments: The petitioner argued that the respondent authority failed to adhere to the provisions of Section 161 of the GST Act, 2017. Specifically, the petitioner contended that no notice was issued to him, nor was an opportunity of hearing granted before the impugned rectification orders were passed. This failure, according to the petitioner, renders the orders wholly without jurisdiction and a clear violation of statutory provisions. Respondent's arguments: The judgment does not record any specific arguments made by the respondent. However, the court's decision implies that the respondent's action was based on Section 161 of the GST Act, 2017.