M/S.Tvl. Bharath Transports vs. The State Tax Officer 2 (Inspection)

Held

The Court held that the impugned orders were set aside and the matter was remitted back to the first respondent. The Court found that the petitioner had manually submitted a reply on 10.07.2024, following a hearing notice dated 04.07.2024 for a hearing on 12.07.2024. In their reply, the petitioner had sought further time to present their case in person and produce records. The Court observed that the provision mandates a maximum of three personal hearings to the assessee after a DRC-01 notice. Since the petitioner had sought the third hearing, it was incumbent upon the respondent to provide this final opportunity, which was not done. Therefore, the Court directed the first respondent to grant an opportunity of personal hearing to the petitioner. The petitioner undertook to appear on 24.12.2024, and the first respondent was directed to hear the petitioner and pass appropriate orders on merits, subject to the production of documents.

Facts

The petitioner, M/s. Tvl. Bharath Transports, filed six writ petitions challenging orders passed by the State Tax Officer-2 (Inspection) and the Commercial Tax Officer, Tiruchirappalli Division. The impugned orders, dated 09.08.2024, and consequential Form GST DRC-07 notices, pertain to the tax periods 2017-18 to 2022-23. The petitioner contended that after receiving a Form GST DRC-01 notice dated 21.05.2024, they filed a reply and attended hearings on 02.07.2024 and 12.07.2024. On the latter date, they requested further time to produce documents and reschedule the hearing. However, the petitioner claims the respondents passed the impugned orders without granting a mandatory third hearing.

Key Issues

1. Whether the respondents erred in passing the impugned orders without granting a mandatory third personal hearing to the petitioner, as required by the GST provisions, thereby violating principles of natural justice? (Question of law and fact, turning on the interpretation of procedural requirements under GST law). Petitioner's contention: The petitioner argued that the respondents failed to provide a mandatory third hearing despite their request for more time to present documents and have the hearing on another date. They relied on the principle that a third hearing is essential when requested and that the impugned orders were passed arbitrarily without considering their reply and request. They sought for the matter to be remitted back for reconsideration. Respondents' contention: The respondents argued that the three hearings contemplated are not mandatory but directory. They stated that the petitioner did not appear and produce documents despite being granted a personal hearing, and the order was passed based on the available information. They submitted that the petitioner's only remedy is to approach the appropriate authority.