Vasantham Agencies vs. The State Tax Officer (St) Ii (Inspn)

Held

The Court held that the assessment order dated September 6, 2024, passed by the respondent for the tax period 2019-20, was liable to be quashed. The Court found that the respondent failed to comply with the mandatory provisions of Section 169 of the TNGST Act regarding the service of notice. The Court relied on its previous judgment in WP(MD)No.26481 of 2024 etc., batch, dated January 6, 2025, which emphasized that Section 169 mandates service in person, by registered post, or to the registered email ID as alternative modes. Only upon failure or impracticability of these modes could other methods, such as publication on the portal, be resorted to. The Court noted that the respondent admitted non-compliance with Section 169. Therefore, the impugned assessment order was quashed and treated as a show cause notice. The petitioner was directed to file a reply by February 22, 2025, after which the respondent was to afford a hearing and pass a fresh order on merits. The ratio decidendi is that statutory provisions for service of notice, particularly those ensuring principles of natural justice, must be strictly adhered to, and service solely through a common portal without prior attempts at prescribed modes is insufficient.

Facts

The petitioner, Vasantham Agencies, challenged an assessment order dated September 6, 2024, passed by the State Tax Officer (ST)-II (Inspn.) for the tax period 2019-20. The petitioner provides manpower supply and cleaning services. The respondent conducted an inspection from February 20, 2023, to February 23, 2023, and subsequently issued a demand for tax and penalty. The petitioner argued that they were not served with any notice seeking explanation for the alleged defects detected during the inspection, violating principles of natural justice and Section 169 of the TNGST Act. The respondent conceded that the notice was not served in compliance with Section 169, having been served only through the respondent portal.

Key Issues

1. Whether the assessment order dated September 6, 2024, passed by the respondent is illegal, arbitrary, without jurisdiction, and in violation of the principles of natural justice, specifically concerning the service of notice under Section 169 of the TNGST Act? Petitioner's Contention: The petitioner argued that no proper notice was served to seek an explanation for the alleged defects found during the inspection. They contended that as per Section 169 of the TNGST Act, notice must be served in person, by registered post, or to the registered email ID. Failure to comply with these modes renders the assessment order unsustainable. They relied on the judgment in WP(MD)No.26481 of 2024 etc., batch, dated January 6, 2025. Respondent's Contention: The respondent, on instructions, submitted that the petitioner was served notice through the respondent portal, admitting that this mode of service did not comply with Section 169 of the TNGST Act.