M/S. Arni Engineering Tech Private Limited vs. The State Tax Officer-1(Inspection)

Facts

The petitioner, Arni Engineering Tech Private Limited, filed a writ petition challenging an assessment order dated January 16, 2025, passed by the first respondent, the State Tax Officer – 1 (Inspection). The petitioner contended that an earlier order dated September 5, 2024, was passed by the second respondent under Section 74 of the Tamil Nadu Goods and Services Tax (TNGST) Act, 2017, without issuing any notice. The petitioner further argued that the subsequent order dated January 16, 2025, was passed by the first respondent without invoking the procedure under Section 161 of the TNGST Act, 2017, for rectification of errors, and crucially, without providing the petitioner with an opportunity of being heard, thereby violating the principles of natural justice. The respondents, through the learned Government Advocate, conceded that the matter could be remanded for reconsideration.

Held

The Court, after considering the submissions of both parties, decided to remand the matter back to the first respondent for fresh consideration. The Court found merit in the petitioner's contention that the earlier assessment order was passed without affording sufficient opportunity of hearing. Furthermore, the Court acknowledged the petitioner's grievance that the subsequent order dated January 16, 2025, was passed without notice or in compliance with the procedure contemplated under Section 161 of the TNGST Act, 2017. The reasoning was based on the admitted violation of natural justice principles and procedural irregularities. The ratio decidendi is that orders passed without notice and opportunity of hearing, and without following prescribed procedural safeguards, are liable to be set aside and remanded for fresh adjudication. The first respondent is directed to review the petitioner's case, afford due opportunity of hearing, and pass appropriate orders on merits and in accordance with law within four months from the date of receipt of the order. No issue was expressly left undecided.

Key Issues

1. Whether the impugned order dated January 16, 2025, passed by the first respondent is liable to be quashed for violation of the principles of natural justice, specifically for being passed without issuing notice to the petitioner and without affording an adequate opportunity of hearing, contrary to the provisions of the TNGST Act, 2017? 2. Whether the first respondent erred in passing the subsequent order dated January 16, 2025, without following the procedure contemplated under Section 161 of the TNGST Act, 2017, for rectification of errors, and without issuing proper notice? Petitioner's Arguments: The petitioner argued that both the initial order dated September 5, 2024, and the subsequent order dated January 16, 2025, were passed in violation of the principles of natural justice. Specifically, the petitioner contended that no notice was issued before the first order, and the second order was passed without notice and without adhering to the procedural requirements of Section 161 of the TNGST Act, 2017. Respondents' Arguments: The learned Government Advocate for the respondents fairly submitted that the matter could be remanded back to the first respondent for reconsideration and passing of a fresh order.