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 assessment year 2020-21, is liable to be quashed. The Court found that the respondent had failed to comply with the mandatory provisions of Section 169 of the TNGST Act regarding the service of notice. The Court reiterated its previous finding in WP(MD)No.26481 of 2024 etc., batch, that Section 169 mandates service in person, by registered post, or by registered email ID as alternative modes, and only upon failure or impracticability of these modes can other methods be resorted to. The respondent's submission that notice was served through the portal was insufficient. The Court reasoned that strict observance of the principles of natural justice, including proper service of notice, is essential. Consequently, the impugned assessment order was quashed and treated as a show cause notice. The petitioner was directed to file their reply by February 22, 2025, after which the respondent was to afford a hearing and pass a fresh order on merits.

Facts

The petitioner, Vasantham Agencies, represented by its Proprietor N. Monikandan, filed a writ petition challenging an assessment order dated September 6, 2024, passed by the respondent, The State Tax Officer (ST)-II (Inspn.), for the assessment year 2020-21. The petitioner provides manpower supply and cleaning services. The respondent conducted an inspection under Section 67 of the Tamil Nadu Goods and Services Tax Act, 2017 (TNGST Act) from February 20, 2023, to February 23, 2023, and subsequently raised a demand for tax and penalty. The petitioner's primary contention was that they were not served with any notice seeking explanation for the alleged defects found during the inspection, which violates Section 169 of the TNGST Act. The respondent conceded that the notice was served through the respondent portal, not in compliance with Section 169.

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 mode of service of notice under Section 169 of the TNGST Act? Petitioner's Arguments: The petitioner argued that they were not served with any notice seeking an explanation for the alleged defects detected during the inspection. They contended that as per Section 169 of the TNGST Act, which mandates service in person, by registered post, or by registered email ID, an assessment order cannot be sustained if these modes are not followed. They relied on a previous judgment of this Court in WP(MD)No.26481 of 2024 etc., batch, dated January 6, 2025. Respondent's Arguments: The respondent, on instructions, submitted that the petitioner was served notice through the respondent portal. They implicitly conceded that this mode of service did not comply with the requirements of Section 169 of the TNGST Act.