Iyyanan Eswaran vs. The Appellate Deputy Commissioner (St) (GST)

Facts

The petitioner, Iyyanan Eswaran, proprietor of TvI. Iyyanan Eswaran, filed a writ petition challenging an order dated 24.12.2025 and its summary in Form GST DRC-07, issued by the Deputy State Tax Officer-II (2nd respondent). This order pertained to the tax period April 2021 to March 2022. The petitioner contended that the order was passed in breach of the principles of natural justice, as they were not afforded an effective opportunity of hearing. The petitioner sought to quash the impugned order and requested a re-adjudication of the show cause notice dated 21.08.2025, with permission to file a reply, supporting documents, and details of input tax credit utilization, along with a personal hearing. Alternatively, the petitioner sought directions for the Appellate Deputy Commissioner (ST) to receive a statutory appeal despite the delay, subject to pre-deposit. The petitioner also sought the lifting of attachment on bank accounts and a stay on recovery proceedings.

Held

The Court held that the impugned order dated 24.12.2025 was indeed passed without hearing the petitioner, thus violating the principles of natural justice. Consequently, the Court set aside the impugned order. As a condition for this relief, the petitioner was directed to remit 25% of the disputed tax demand within thirty days from the date of receipt of the order. Upon such remittance, the matter was to be remanded to the Deputy State Tax Officer-II for a fresh adjudication. The petitioner would be provided a reasonable opportunity to contest the matter on merits, including filing their reply and supporting documents, and afforded an effective personal hearing. A fresh order was to be issued within five months from the date of the remittance of 25% of the tax demand. The Court explicitly stated that this decision was subject to the remittance of 25% of the tax demand.

Key Issues

1. Whether the impugned order dated 24.12.2025, issued by the Deputy State Tax Officer-II, is liable to be quashed for violating the principles of natural justice, specifically the right to a personal hearing, as contended by the petitioner? The petitioner argued that the order was passed without affording them an effective opportunity to present their case, including filing a reply and supporting documents, and without a proper personal hearing. The petitioner relied on the general principles of natural justice. The respondents, represented by the Government Advocate (Taxes), did not record any specific arguments against this contention, but accepted notice and agreed to the terms proposed by the Court.