Tvl.Kuttuva Silicates (P) Limited vs. The Union Of INDIA

Facts

The petitioner, Tvl. Kuttuva Silicates (P) Limited, filed a writ petition challenging Notification No. 09/2023 - Central Tax dated 31-03-2023 issued by the first respondent (Union of India), G.O Ms.No.41 issued by the third respondent (State of Tamil Nadu), and an order dated 31.12.2023 passed by the fifth respondent (State Tax Officer). The petitioner contended that the order passed by the fifth respondent failed to consider prior orders dated 01.03.2019, 06.03.2019, and 04.03.2019 concerning assessment years 2015-2016, 2016-2017, and 2017-2018. The petitioner had also replied to the notice but did not appear before the respondent authorities. Subsequently, an application for rectification filed by the petitioner on 05.03.2024 was rejected on 22.03.2024, citing Section 161 of the GST enactment.

Held

The Court held that the impugned order passed by the fifth respondent was liable to be set aside. The primary reason for this decision was the failure of the fifth respondent to consider the previous orders passed on 01.03.2019, 06.03.2019, and 04.03.2019, which pertained to the assessment years 2015-2016, 2016-2017, and 2017-2018. Furthermore, the Court found that the order was passed without affording the petitioner an adequate opportunity of being heard, thereby violating the principles of natural justice. The Court reasoned that a de novo order must be passed, ensuring that these prior orders are duly considered. The ratio decidendi is that statutory authorities must adhere to principles of natural justice, including considering relevant prior decisions and providing a fair hearing, before passing orders that affect taxpayers. The Court directed the fifth respondent to pass fresh orders on merits and in accordance with law, considering the aforementioned prior orders, within 12 weeks. The writ petition was allowed with this direction.

Key Issues

1. Whether the impugned order passed by the fifth respondent is liable to be quashed for failing to consider previous orders dated 01.03.2019, 06.03.2019, and 04.03.2019 concerning assessment years 2015-2016, 2016-2017, and 2017-2018, and for not affording an opportunity of being heard to the petitioner? (Mixed question of law and fact, turning on principles of natural justice and procedural fairness under the GST Act). Petitioner's Contention: The petitioner argued that the order passed by the fifth respondent was arbitrary, void, and contrary to Section 168A of the Goods and Services Tax Act, 2017, and violative of Articles 14 and 19(1)(g) of the Constitution of India. The core of the petitioner's argument was that the impugned order was passed without considering relevant prior orders and without providing a proper hearing, thus violating principles of natural justice. Respondents' Contention: The judgment does not explicitly record any arguments made by the respondents. However, the rejection of the petitioner's rectification application citing Section 161 of the GST enactment suggests the respondents relied on statutory provisions for procedural matters.