M/S. Ltms Hollow Blocks vs. The Deputy State Tax Officer 1

Facts

The petitioner, M/S.LTMS Hollow Blocks, filed a writ petition challenging an order dated 01.08.2023 passed by the Deputy State Tax Officer-1, Tenkasi. The petitioner sought to quash the order for alleged illegality and violation of natural justice, and requested a fresh assessment with an opportunity for a personal hearing. The impugned order was passed for the tax period 2018-2019. The respondent authority contended that the writ petition was filed beyond the statutory period for appeal and that notices were duly sent. The petitioner stated that the disputed tax had been paid and sought a chance to argue the case on merits.

Held

The Court held that the impugned order dated 01.08.2023 was liable to be set aside. The Court noted that the order was passed without issuing DRC-01A and without providing a notice for personal hearing, which constitutes a violation of natural justice. While the respondent argued that the writ petition was filed beyond the statutory appeal period, the Court considered the fact that the petitioner had paid the disputed tax and that the impugned order lacked substantive reasoning, merely pointing out the petitioner's failure to respond. Therefore, the Court decided to interfere with the order. The Court's reasoning was that despite the procedural lapses by the petitioner in responding to notices, the lack of a proper hearing and reasoned order by the authority warranted intervention. The ratio decidendi is that even if a party is at fault in responding to notices, the tax authority must still adhere to principles of natural justice, including providing a personal hearing and issuing a reasoned order, especially when the tax has been paid. The Court directed the respondent to re-do the assessment afresh within 60 days of receiving a copy of the order, after the petitioner files a reply to the notices and required documents within 30 days.

Key Issues

1. Whether the impugned order dated 01.08.2023, passed by the Deputy State Tax Officer-1, Tenkasi, is liable to be quashed for violation of the principles of natural justice, specifically for not providing an opportunity of personal hearing and for lacking reasoned analysis, as contended by the petitioner? 2. Whether the writ petition is maintainable, considering it was filed beyond the statutory period for filing an appeal under Section 107 of the TNGST Act, 2017, as argued by the respondent? Petitioner's arguments: The petitioner argued that the impugned order was passed without issuing DRC-01A and without providing a notice for personal hearing. They also claimed the order lacked reasoning. The petitioner further submitted that the disputed tax was paid on 10.02.2024 and sought an opportunity to present their case on merits. Respondent's arguments: The respondent contended that the writ petition should be dismissed as it was filed beyond the statutory period for appeal, citing the Supreme Court decision in Assistant Commissioner (CT) LTU, Kakinada and others Vs. Glaxo Smith Kline Health Care Limited. They also argued that notices in Form ASMT-10 and DRC-01 were sent by registered post, and the order was posted on the web portal, thus providing a full opportunity to the petitioner, who failed to respond.