Tvl.Vectra Computer Solutions vs. The Commissioner Of Commercial Taxes

Facts

The petitioner, Tvl.Vectra Computer Solutions, filed a writ petition challenging an order passed by the third respondent, the State Tax Officer, Inspection Cell – III. The petitioner's GST registration was cancelled on 06.09.2018 for non-filing of returns, which was later rectified. The petitioner remitted GST dues of Rs.66,781/- along with late fees. A notice dated 29.10.2019 was issued by the third respondent pointing out defects such as sales omission, purchase omission, and proposing tax on service charges and discounts paid. The petitioner did not submit a reply. Subsequently, the impugned order was passed levying tax and penalty. The respondents contended that the writ petition was not maintainable as the petitioner could have challenged the order under Section 107 of the Act.

Held

The Court held that the impugned order passed by the third respondent is liable to be quashed on the sole ground that no personal hearing was granted to the petitioner. The Court referred to Section 75(4) of the CENTRAL GOODS AND SERVICES TAX ACT, 2017, which mandates that an opportunity of hearing shall be granted where a request is received in writing or where any adverse decision is contemplated. The Court found that the notice dated 29.10.2019 did not offer a personal hearing, and the impugned order did not indicate that such an opportunity was provided. Therefore, the principles of natural justice were violated. The Court quashed the impugned order and remitted the matter back to the third respondent for passing fresh orders in accordance with law, after providing a personal hearing to the petitioner. The writ petition was allowed.

Key Issues

1. Whether the impugned order levying tax and penalty is liable to be quashed on the ground of violation of principles of natural justice, specifically the lack of a personal hearing, as contemplated under Section 75(4) of the CENTRAL GOODS AND SERVICES TAX ACT, 2017? Petitioner's Contention: The petitioner argued that the impugned order should be quashed because no personal hearing was granted, which is a mandatory requirement under Section 75(4) of the CGST Act, 2017, especially when an adverse decision is contemplated. The notice dated 29.10.2019 did not offer a personal hearing, and the impugned order did not mention that such an opportunity was provided. Respondents' Contention: The respondents argued that the writ petition was not maintainable as the petitioner had an alternative remedy of challenging the impugned order under Section 107 of the Act. They did not specifically address the issue of personal hearing in their arguments presented to the court.