Madras HC quashes GST Order Due to Denied Hearing; Orders 10% Tax Deposit for Reassessment

By CA Sandeep Kanoi Goods and Services Tax Judiciary March 9, 2025

Tvl. P. Rajesekaran Vs State Tax Officer (Roving Squad-II) (Madras High Court)

Madras High Court set aside the impugned GST assessment order against Tvl. P. Rajasekaran, a contractor with the Tamil Nadu Power Generation and Distribution Corporation Limited, citing a violation of natural justice. The dispute arose from a surprise inspection under Section 167 of the Tamil Nadu Goods and Services Tax Act, 2017, which revealed discrepancies in outward supply figures and input tax credit claims. The petitioner received multiple notices, including a show cause notice and personal hearing notices. However, he had sought additional time to respond, which was allegedly not considered before the final order was passed. The petitioner contended that the order was unfairly confirmed without providing him adequate opportunity to present his objections. Conversely, the respondents argued that the petitioner had been given multiple chances for a hearing but failed to appear.

Considering a recent judgment in a similar case, the High Court ruled in favor of the petitioner, provided he deposits 10% of the disputed tax within four weeks. Upon compliance, the assessment order would be treated as a show cause notice, allowing the petitioner to submit objections with supporting documents. The court also directed that if the deposit is made, the bank account attachment and garnishee proceedings be lifted. However, failure to meet the conditions would lead to the restoration of the original order. With this conditional relief, the writ petition was disposed of without costs, ensuring a fair adjudication process while safeguarding the revenue interests.

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