G Alwar Muthukumar vs. The State Tax Officer

Facts

The petitioner, G. Alwar Muthukumar, filed three writ petitions challenging assessment orders passed by the State Tax Officer, Tuticorin II Assessment Circle, for the periods 2017-2018, 2020-2021, and 2021-2022. The petitioner contended that notices were issued only through the GST portal, which they did not follow up on, leading to a failure to file appeals within the prescribed time. Consequently, coercive action was taken, including freezing the petitioner's bank account, hindering their business operations. The petitioner sought permission to prosecute their appeals before the appellate authority. The respondent argued that notices and opportunities for hearing were provided before passing the assessment orders.

Held

The Court held that the impugned assessment orders were passed without ensuring actual receipt of notices by the petitioner and without providing an adequate opportunity for personal hearing, thus violating the principles of natural justice. The Court acknowledged that notices were issued only through the portal, and the petitioner, not being acquainted with this mode, failed to follow up. The Court emphasized that the object of the government is to promote trade, not curtail it, and coercive action without a proper hearing significantly affects a business. Therefore, to provide an opportunity to the petitioner, the Court directed the appellate authority (suo motu impleaded as the second respondent) to accept the appeals to be filed by the petitioner without insisting on the limitation period and to decide them on merits within a reasonable time. The Court did not decide on the merits of the assessment orders themselves.

Key Issues

1. Whether the impugned assessment orders, passed without ensuring actual receipt of notices by the petitioner and without providing an adequate opportunity for personal hearing, are liable to be quashed for violating principles of natural justice, particularly in light of the petitioner's claim of not being acquainted with portal-based notices? (Question of law and fact, turning on principles of natural justice and procedural fairness under the GST Act). Petitioner's arguments: The petitioner argued that notices were solely issued through the GST portal, which they failed to follow due to unfamiliarity, leading to a lapse in filing timely appeals. They claimed a strong case before the appellate authority and sought indulgence to file appeals. The freezing of their bank account severely impacted their business. Revenue's arguments: The respondent contended that notices were issued and opportunities for hearing were provided before passing the impugned assessment orders.