Natural Remedies Pvt. Ltd Vs Joint Commissioner of Stat Tax (Madras High Court)
The Madras High Court has set aside an order-in-original dated December 31, 2023, issued against Natural Remedies Pvt. Ltd., a company that manufactures herbal healthcare products. The court’s decision was based on a clear violation of the principles of natural justice, as the tax authorities failed to provide the company with a personal hearing and did not consider its detailed reply to the show-cause notice.
Following an audit, the petitioner received a show-cause notice on September 29, 2023, and was given insufficient time to respond. Despite a technical glitch on the tax portal, the company submitted a comprehensive reply on October 30, 2023, via a physical copy. In its reply, the company explicitly requested a personal hearing. However, the impugned order was issued without granting this request. The tax department’s counsel admitted in court that no personal hearing was provided and claimed that the company’s reply was not in their files.
The court, however, confirmed that the petitioner’s reply, which included the request for a personal hearing, was on record. The judgment reiterated a fundamental principle of tax law: a personal hearing is mandatory either when a taxpayer requests one or when an order adverse to them is being proposed. By not providing this opportunity and by failing to consider the submitted reply, the tax authorities’ actions were deemed procedurally flawed.
