Tvl. Signet Industries Limited Vs State Tax officer (Madras High Court)
Madras High Court held that section 75(4) of the GST Act mandates that if an adverse order is going to be passed, it is mandatory to provide an opportunity of personal hearing. Thus, order confirming demand passed without providing personal hearing is against the principles of natural justice.
Facts- A notice in Form DRC-01 was issued by the respondent on 28.12.2023. The petitioner filed reply to the said notice on 20.02.2024. Without affording an opportunity of personal hearing to the petitioner, the assessment order came to be passed on 26.04.2024.
Petitioner contended that if the respondent is intended to take any action and pass the assessment order against the petitioner, it is mandatory to issue notice of personal hearing u/s. 75(4) of the GST Act. Therefore, he submitted that the impugned order is in violation of Section 75(4) of the GST Act.
Further, an attachment order was passed subsequent to the impugned assessment order by virtue of notice dated 30.09.2024 and the petitioner’s bank account was also freezed. He further submitted that it is a cash credit account since the respondent has fixed the credit limit, whenever the amount is required, they can take the credit only for the purpose of business. Therefore, attachment order may be lifted and permit the petitioner to operate the cash credit account. Hence, he prayed for setting aside the impugned order and this Court may issue direction to de-freeze the cash credit account of the petitioner.
