M/S. Sree Akhila Jewellary vs. The Commercial Tax Officer

Facts

The petitioner, M/s.Sree Akhila Jewellery, is challenging a Rectification Order dated 02.07.2024, issued by the respondent, the Commercial Tax Officer, Theni -1 Assessment Circle. This impugned order was passed under Section 161 of the GST Act, 2017, purportedly to rectify an earlier order dated 27.04.2024. The petitioner contends that the demand initially quantified in the notices preceding the 27.04.2024 order was re-quantified in the impugned order. A key grievance is that the impugned order was passed without providing due notice to the petitioner. The petitioner seeks to quash the rectification order as being without jurisdiction and a violation of statutory provisions.

Held

The Court held that the impugned Rectification Order dated 02.07.2024, passed by the respondent under Section 161 of the GST Act, 2017, is unsustainable and liable to be set aside. The primary reasoning for this decision was that the order was passed without providing due notice to the petitioner. The Court found this procedural lapse to be a critical flaw, rendering the order invalid. The Court referenced its own prior decision in W.P.(MD) No.13232 of 2024, which established a precedent for interference in similar situations where due process was not followed. The ratio decidendi is that any order passed under Section 161 of the GST Act, 2017, which affects a taxpayer's rights or liabilities, must be preceded by adequate notice and an opportunity to be heard. The Court set aside the impugned order and remitted the matter back to the respondent for a fresh decision. The impugned order was to be treated as an addendum to the notice for rectifying the order dated 27.04.2024. The petitioner was granted 30 days to file a reply, and the respondent was directed to pass a fresh order within two months after hearing the petitioner.

Key Issues

1. Whether the Rectification Order dated 02.07.2024, passed by the respondent under Section 161 of the GST Act, 2017, is valid when it was issued without providing due notice to the petitioner? Petitioner's arguments: The petitioner argues that the impugned rectification order is wholly without jurisdiction and a clear violation of statutory provisions. They specifically highlight that the order was passed without due notice, rendering it unsustainable. The petitioner relies on a previous judgment of this Court in W.P.(MD) No.13232 of 2024 (Tvl.Podhigai Motors Vs. The Assistant Commissioner (ST)) dated 20.06.2024, which dealt with similar circumstances. Respondent's arguments: The respondent, represented by the Additional Government Pleader, made submissions, but the judgment does not detail their specific arguments beyond acknowledging their presence.