M/S. Ayappa Pharma vs. The Deputy State Tax Officer

Held

The Court held that the order rejecting the petitioner's application for rectification dated 04.06.2024 was unsustainable as it was passed without assigning any reasons. The Court noted that Section 161 of the TNGST Act mandates that if an application for rectification is made, and no error on the face of the record is made out, the application should not be rejected without proper consideration. In this case, the petitioner had pointed out an error in their return and sought a revised assessment. The Court found that the first respondent had not considered these reasons. Therefore, the Court set aside the order rejecting the rectification application and remitted it back to the first respondent for a fresh decision. The Court also directed that if the authorities decided not to entertain the rectification request, they must provide detailed reasons. The further proceedings pursuant to the DRC-07 notice dated 02.01.2024 were ordered to be kept in abeyance. The Court also granted the petitioner an opportunity of personal hearing before the first respondent, to be completed within six weeks.

Facts

The petitioner, M/s. Ayappa Pharma, filed a writ petition challenging an order of assessment dated 02.01.2024, a DRC-07 notice, an order rejecting their application for rectification dated 04.06.2024, and a bank attachment order dated 23.09.2024. The petitioner contended that the assessment order was passed without providing an opportunity to be heard. Subsequently, they filed a rectification application, which was rejected by the first respondent without assigning any reasons. The respondents argued that the writ petition should not be entertained as the petitioner had filed a rectification application. They also contended that the rejection of the rectification application was justified as the reasons provided were not satisfactory.

Key Issues

1. Whether the order of assessment dated 02.01.2024 was passed in violation of the principles of natural justice by not affording an opportunity to the petitioner? (Question of law) 2. Whether the rejection of the petitioner's application for rectification dated 04.06.2024 by the first respondent was arbitrary and without assigning proper reasons, contrary to Section 161 of the TNGST Act? (Question of mixed law and fact) Petitioner's Arguments: The petitioner argued that the initial assessment order was passed without providing an opportunity to be heard. They further contended that their subsequent application for rectification was rejected without any valid reasons, violating the principles of natural justice and the provisions of Section 161 of the TNGST Act. They sought an opportunity of personal hearing before the first respondent. Respondents' Arguments: The respondents contended that the writ petition should not be entertained because the petitioner had already filed a rectification application. They argued that the first respondent had the power to reject the rectification application if the reasons provided were not satisfactory, and that the rejection in this case was justified.