M/S.Maheswari Enterprises vs. The State Tax Officer

Held

The Court held that while the petitioner admittedly did not file a reply within the time or explicitly seek a personal hearing, the principles of natural justice, as interpreted in the G.V.Cotton Mills (P) Ltd. case, mandate that a personal hearing must be given when adverse orders are contemplated. The Court found that no such opportunity was provided to the petitioner in this instance. Therefore, considering the facts and circumstances and in the interest of justice, the Court decided to grant one more opportunity to the petitioner. The impugned orders dated 15.10.2020 were set aside, and the matter was remanded back to the respondent for fresh consideration. The respondent was directed to provide a reasonable opportunity, including a personal hearing as contemplated under Section 75(4) of the TNGST Act, and pass appropriate orders within three months. The petitioner was directed to cooperate with the respondent.

Facts

The petitioner, M/s. Maheswari Enterprises, a distributor for Vodafone Idea Limited, filed three writ petitions challenging orders dated 15.10.2020 passed by the State Tax Officer, Madurai. These orders pertained to the tax periods 2017-18, 2018-19, and 2019-20. The petitioner's GST registration was cancelled on 06.11.2019. Subsequently, the respondent issued a notice on 12.05.2020 regarding business transactions and non-filing of returns post-cancellation. The petitioner applied for revocation of GST registration on 12.08.2020. A show-cause notice was issued on 30.09.2020, requiring objections within fifteen days. The petitioner contacted their Chartered Accountant to prepare a reply, but the respondent passed the impugned orders on the last date fixed for submission of the reply, allegedly without providing a personal hearing.

Key Issues

1. Whether the impugned orders passed by the respondent are liable to be quashed for violating the principles of natural justice due to the denial of a personal hearing, as contemplated under Section 75(4) of the Tamil Nadu Goods and Services Tax Act, 2017? The petitioner argued that a reasonable opportunity of personal hearing should have been granted, citing a violation of natural justice and relying on the Division Bench judgment in G.V.Cotton Mills (P) Ltd. vs. The Assistant Commissioner(CT), Coimbatore. They contended that even if no objection was filed to pre-assessment notices, an opportunity for personal hearing must be provided. The respondent argued that since the petitioner did not request a personal hearing in writing and did not file a reply within the stipulated fifteen days, nor sought an extension, the proposals in the show-cause notices were confirmed. They asserted that Section 75(4) of the TNGST Act mandates a hearing only upon a written request or when an adverse decision is contemplated, neither of which, in their view, was met by the petitioner.