M/S. Shasthiri Senthamarai Kannan vs. The Deputy Commercial Tax Officer (St)

Facts

The petitioner, M/s.Shasthiri Senthamarai Kannan, filed a writ petition challenging an assessment order dated June 19, 2023, passed by the Deputy Commercial Tax Officer (ST), Karur. The petitioner, a registered taxpayer under GST, had provided manpower supply services. The business was closed since 2021, and the GSTIN registration was cancelled for non-filing of returns. The petitioner received a notice in Form GST ASMT 10 for the period 2019-2020, followed by a show cause notice in Form GST DRC-01 under Section 73 of the Act. This notice indicated that personal hearing details were 'Not Applicable'. Subsequently, an assessment order was passed, and the petitioner was served only with a summary of the order, not the full assessment order. The petitioner contended that the failure to grant a personal hearing vitiated the proceedings.

Held

The Court held that the failure to grant a personal hearing to the petitioner, as mandated by Section 75(4) of the TNGST Act, 2017, vitiated the assessment proceedings. The Court noted that the show cause notice itself indicated 'Not Applicable' for the personal hearing details, which is a clear violation of the principles of natural justice. The respondent acknowledged this lapse and agreed to re-do the assessment after providing an opportunity for a personal hearing. Consequently, the Court directed the petitioner to appear before the respondent on September 26, 2024, with their reply and supporting documents. The respondent is to consider these submissions, grant a personal hearing, and then pass appropriate orders in accordance with the law within four weeks thereafter. The Court also stipulated that if the petitioner fails to appear on the specified date, the impugned order would stand revived. The issue of whether the petitioner was properly served with the assessment order was implicitly addressed by the direction to re-do the assessment.

Key Issues

1. Whether the assessment order dated June 19, 2023, passed by the respondent is liable to be quashed for violation of the principles of natural justice, specifically Section 75(4) of the TNGST Act, 2017, due to the failure to provide a personal hearing? Petitioner's arguments: The petitioner argued that the assessment order is illegal, arbitrary, and without jurisdiction because the respondent failed to provide a mandatory personal hearing as contemplated under Section 75(4) of the TNGST Act, 2017. The notice itself indicated 'Not Applicable' for the date, time, and venue of the personal hearing, which fundamentally vitiates the entire assessment process. Furthermore, the petitioner contended that they were not served with the actual assessment order, only a summary. Respondent's arguments: The respondent, through the learned Additional Government Pleader, conceded that the assessment could be redone after affording the petitioner a reasonable opportunity of hearing. The respondent agreed to the petitioner appearing on September 26, 2024, with their reply and supporting materials.