Tvl. Mekala Timber And Hardwares vs. The State Tax Officer (Inspection Cell)

Held

The Court allowed the writ petitions on the ground of violation of the principles of natural justice. The Court found that the respondent's explanation for not sending a personal hearing notice, i.e., the petitioner's whereabouts being unknown, was not acceptable. The Court emphasized that even if a pre-revision notice was returned, the assessing officer has a statutory duty to send a personal hearing notice in the mode contemplated by the statute and cannot assume it would not be received. The impugned orders were set aside. However, to address the respondent's contention of the petitioner's "hide and seek approach," the petitioner's counsel provided an undertaking that the assessee would visit the respondent's office on April 9, 2021, at 11:00 a.m. to provide their address for future communications. On that date, the respondent could inform the petitioner of the next hearing date and provide a copy of the pre-revision notice, allowing the petitioner to file objections. The ratio decidendi is that a personal hearing is a fundamental aspect of natural justice, and its denial, even with a weak justification, vitiates assessment orders.

Facts

The petitioner, Tvl. Mekala Timber & Hardwares, filed three writ petitions challenging orders passed by the State Tax Officer (Inspection Cell), Tirunelveli. These orders pertained to the financial years 2017-18, 2018-19, and 2019-20. The petitioner sought to quash these orders, alleging they were illegal, invalid, and violative of the principles of natural justice. Specifically, the petitioner requested that the respondent issue a demand notice, show cause notice, DRC proceedings, conduct a detailed inspection, and then provide an opportunity for objections and a personal hearing. The respondent's explanation for not sending a personal hearing notice was that the petitioner's whereabouts were unknown.

Key Issues

1. Whether the impugned assessment orders are illegal, invalid, and violative of the principles of natural justice due to the absence of a personal hearing, as contemplated under Section 75(4) and 75(5) of the GST Act? The petitioner argued that the assessment orders were passed without affording them an opportunity for a personal hearing, which is a mandatory requirement under Section 75(4) and 75(5) of the GST Act, thus violating the principles of natural justice. They sought to quash the orders and for a direction to follow the proper procedure, including issuing notices and providing an opportunity for objections and a personal hearing. The respondent contended that no personal hearing notice was sent because the petitioner's whereabouts were unknown. They also suggested that the petitioner was adopting a "hide and seek approach."