M/S.Tvs Sensing Solution PVT. LTD. vs. State Tax Officer

Held

The Court held that while there is no statutory embargo on an inspecting officer issuing a show cause notice or adjudicating an issue, provided they meet the definition of a 'proper officer' under Section 2(91) of the GST enactments, it is advisable to eliminate the scope of bias. Following the precedent set in M/s. Rasathe Garments, the Court quashed the impugned order. The case was remitted back to the third respondent, the Assistant Commissioner, Madurai Division, for fresh adjudication. The third respondent was directed to pass final orders on merits and in accordance with law expeditiously, preferably within three months from the date of receipt of the order. The petitioner was granted the liberty to furnish all relevant records and documents and was assured a hearing before the final order is passed. The Court allowed the Writ Petition.

Facts

The petitioner, M/s. TVS Sensing Solutions Pvt. Ltd., challenged an order dated 14.03.2024 passed by the second respondent, the State Tax Officer (Intelligence), Madurai. The petitioner contended that the order was unsustainable because the second respondent was the officer who investigated the case. The petitioner argued that the issue was covered by a previous decision of the same High Court in M/s. Rasathe Garments Vs. The State Tax Officer (ST) Inspn., and others. The Government Advocate for the respondents confirmed that the issue was indeed covered by the aforementioned precedent. The impugned order was issued for the tax period 2018-19.

Key Issues

1. Whether an inspecting officer, who investigated a case, can also adjudicate the issue, and if so, under which provision of the GST enactments? 2. Whether the impugned order dated 14.03.2024 passed by the second respondent is liable to be quashed on the grounds of bias or procedural impropriety, considering the officer's role in investigation? Petitioner's Contention: The petitioner argued that the impugned order was unsustainable as the investigating officer had passed the order, citing the decision in M/s. Rasathe Garments. The petitioner relied on the principle that an inspecting officer acting as an adjudicating officer could lead to bias. Respondents' Contention: The learned Government Advocate for the respondents confirmed that the issue was covered by the decision in M/s. Rasathe Garments, implying agreement with the petitioner's reliance on that precedent.