Adverse Tax Proposal: Personal Hearing Mandatory, Failure to do so invalidates order

Vijayalakshmi Supplyer Vs State Tax Officer (Madras High Court)

The order under GST law must offer a personal hearing if requested or if adverse tax proposals are made. Failure to do so invalidates the order.

Introduction: In the case of Vijayalakshmi Supplier Vs State Tax Officer, the Madras High Court scrutinized the procedural adherence in GST demand orders, emphasizing the necessity of granting a personal hearing. The court’s decision to set aside the order underlines the importance of statutory compliance, ensuring taxpayers’ rights are protected.

Detailed Analysis:

Background: The petitioner, Vijayalakshmi Supplier, faced allegations of under-declaring output tax and claiming excess Input Tax Credit (ITC). A show-cause notice was issued on 27.12.2023, citing these defects. The petitioner responded on 16.02.2024, clarifying the turnover discrepancy due to an inadvertent duplication of a bill and asserting that only eligible ITC was claimed for building materials.

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