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

Held

The Court held that the assessment order dated 06.09.2024 passed by the respondent is liable to be quashed for non-compliance with Section 169 of the TNGST Act. The Court relied on its previous judgment in WP(MD)No.26481 of 2024 etc., batch, which emphasized that Section 169 mandates service of notice in person, by registered post, or to the registered email ID as alternative modes, and only upon failure or impracticability of these modes can other methods like publication on the common portal be resorted to. The Court found that the respondent's admission of serving notice only through the portal, without adhering to the mandatory modes prescribed in Section 169, violated the principles of natural justice. The Court quashed the impugned assessment order and directed that it be treated as a show cause notice. The petitioner was granted liberty to file their reply by 22.02.2025, after which the respondent must afford an opportunity of hearing and pass a fresh order on merits. The ratio decidendi is that statutory provisions for service of notice, particularly those ensuring natural justice, must be strictly followed, and rules cannot override statutory mandates.

Facts

The petitioner, Vasantham Agencies, represented by its Proprietor N. Monikandan, filed a writ petition challenging an assessment order dated 06.09.2024 passed by the respondent, the State Tax Officer (ST)-II (Inspn.), for the assessment year 2018-19. The petitioner provides manpower supply and cleaning services. The respondent conducted an inspection under Section 67 of the TNGST Act from 20.02.2023 to 23.02.2023, recorded the petitioner's statement, and subsequently raised a demand for tax and penalty for the year 2018-19. The petitioner contended that they were not served with any notice seeking explanation for the alleged defects found during the inspection, which is a violation of Section 169 of the TNGST Act.

Key Issues

1. Whether the assessment order dated 06.09.2024 is liable to be quashed for non-compliance with the mandatory service of notice as stipulated under Section 169 of the TNGST Act? The petitioner argued that Section 169 of the TNGST Act mandates service of notice in person, by registered post, or to the registered email ID. Failure to comply with these modes renders the assessment order unsustainable. The petitioner relied on a previous judgment of the High Court in WP(MD)No.26481 of 2024 etc., batch, dated 06.01.2025, which interpreted Section 169 to require strict observance of principles of natural justice. The petitioner further argued that Rules cannot circumscribe the modes of service provided under the Statute. The respondent, through the learned Additional Government Pleader, conceded that the notice was served through the respondent portal and admitted that it was not served in compliance with Section 169 of the TNGST Act.