Tvl.M.Shanmugavelu vs. The State Tax Officer
Original PDF →Facts
The petitioner, Tvl. M. Shanmugavelu, a Government Works Contractor, filed two writ petitions challenging orders dated 04.01.2021 passed by the State Tax Officer, Inspection (Intelligence Wing). The orders pertained to tax periods 2018-19 and 2019-20. The petitioner's place of business was inspected on 10.09.2020, followed by a show cause notice on 20.10.2020. The petitioner submitted a reply on 24.12.2020. The petitioner contended that the respondent passed the impugned orders without affording an opportunity for a personal hearing, thereby violating principles of natural justice and Section 75(4) of the Tamil Nadu Goods and Services Tax Act, 2017. The petitioner also noted that departments had deducted tax payable while settling bills, and it was unclear if these deductions were remitted.
Held
The Court held that the impugned orders were passed in violation of Section 75(4) of the Tamil Nadu Goods and Services Tax Act, 2017, which mandates an opportunity of personal hearing. The Court found that the respondent had issued a show cause notice and received a reply from the petitioner, but proceeded to pass the final orders without affording the petitioner a personal hearing. This procedural defect was considered sufficient ground to quash the orders. The Court reasoned that adherence to principles of natural justice is paramount. The Court directed the respondent to pass fresh assessment orders after providing the petitioner with an opportunity for a personal hearing. The Court also suggested that the respondent should independently verify the materials placed by the petitioner and consider the possibility that the departments which entrusted works contracts to the petitioner might have deducted tax but not remitted it, implying that the entire burden should not be placed solely on the petitioner. The Court did not expressly leave any issue undecided.
Key Issues
1. Whether the impugned orders dated 04.01.2021, passed by the respondent for the tax periods 2018-19 and 2019-20, are liable to be quashed for violation of the principles of natural justice, specifically the failure to provide a personal hearing as contemplated under Section 75(4) of the Tamil Nadu Goods and Services Tax Act, 2017? Petitioner's Contention: The petitioner argued that the respondent passed the impugned orders without granting an opportunity for a personal hearing, which is a mandatory requirement under Section 75(4) of the Tamil Nadu Goods and Services Tax Act, 2017. This procedural lapse renders the orders illegal, arbitrary, and violative of the principles of natural justice. Respondent's Contention: The judgment does not record any specific arguments made by the respondent. However, the respondent is the authority that passed the impugned orders.
Sections Cited
Section 75(4)
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Heard together (2 matters)
Read from the judgment's own cause title. This page is filed under one of them.
Cause title — parties, addresses and appearances
C O M M O N O R D E R Heard the learned counsel on either side.
The petitioner is a works contractor. The specific case of the petitioner is that while settling the bill amounts received, departments had in fact deducted the tax payable. It is not known as to whether remittance was made by the departments or not.
Be that as it may, the petitioner's place of business was inspected by the enforcement wing officials on 10.09.2020. Based on the same, show cause notice was issued on 20.10.2020. The petitioner submitted his reply dated 24.12.2020. However, without granting an opportunity of personal hearing, the impugned orders were straightaway passed. This is on the face of it as violative of Section 75(4) of the Tamil Nadu Goods and Services Tax Act, 2017. 4. Therefore, on this sole ground the orders impugned in these writ petitions are quashed. The writ petitions stand allowed. The matter is remitted to the file of the respondent to pass orders afresh in accordance with law. The respondent is obliged to give personal hearing. The respondent may also consider independently and verify the materials placed by the petitioner. If the department which entrusted works contract to the petitioner, had deducted the tax amount but not remitted the same, the respondent may have to proceed against the concerned department. In my view, the entire burden may not be placed on the petitioner herein. The respondent may also independently verify with the respective departments. No costs. Consequently, connected miscellaneous petitions are closed. Assistant Registrar(CS-III) //// / /2021 Sub Assistant Registrar(CS) PMU Note: In view of the present lock down owing to COVID-19 pandemic, a web copy of the order may be utilized for official purposes, but, ensuring that the copy of the order that is presented is the correct copy, shall be the responsibility of the advocate/litigant concerned. 2/3 https://hcservices.ecourts.gov.in/hcservices/
W.P.(MD)NO. 7291 OF 2021 To: The State Tax Officer, Inspection (Intelligence Wing), Commercial Tax Buildings, Sivakasi. +2 CC to M/s.S.KARUNAKAR, Advocate ( SR-14954 & 14955[F] dated 31/03/2021 ) W.P.(MD)Nos.7291 & 7293 of 2021 31.03.2021 MJ(CO) TR(26.04.2021) 3P 4C 3/3 https://hcservices.ecourts.gov.in/hcservices/
Reproduced from the public record of the Madras High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.