Case Law Details
Sathya Furniture Vs Deputy State Tax Officer-1 (Madras High Court)
In the legal battle of Sathya Furniture Vs Deputy State Tax Officer-1, the Madras High Court rendered a crucial judgment regarding GST payer rights. Despite procedural lapses on the GST portal, the court upheld the petitioner’s entitlement to a personal hearing.
The crux of the matter revolved around the petitioner’s failure to secure a personal hearing before the issuance of an order dated 30.12.2023. Despite timely responses and a clear request for a personal hearing, the petitioner’s plea fell on deaf ears. However, the learned counsel for the petitioner ardently argued that the absence of a personal hearing infringed upon the petitioner’s statutory rights.
Crucially, the court emphasized Section 75(4) of the Tamil Nadu Goods and Services Tax Act, 2017, which unequivocally mandates a personal hearing upon request or when an adverse order is imminent. The petitioner’s explicit request for a personal hearing, albeit not marked on the GST portal, did not absolve the authorities of their statutory duty. This underscores the importance of procedural fairness and adherence to statutory provisions, even in the digital realm.
Furthermore, the court’s ruling serves as a beacon of hope for GST payers grappling with procedural hurdles. It reaffirms the principle of audi alteram partem, the right to be heard, as a cornerstone of administrative justice. By quashing the impugned order and remanding the matter for reconsideration, the court restored faith in due process and fairness.
Conclusion
In conclusion, the Madras High Court’s judgment in Sathya Furniture Vs Deputy State Tax Officer-1 reaffirms the supremacy of procedural fairness in GST proceedings. Despite technological glitches and administrative oversight, the court championed the petitioner’s right to a personal hearing, setting a precedent for future cases. This ruling not only rectifies a procedural lapse but also upholds the principles of natural justice in the digital age.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
An order dated 30.12.2023 is assailed inter alia on the ground that a personal hearing was not provided to the petitioner.
2. As a registered person under applicable GST enactments, the petitioner had filed returns for the assessment period 2017-18. In relation thereto, the petitioner received a show cause notice dated 25.09.2023. Such show cause notice was replied to on 25.11.2023 by providing an explanation with regard to the reason for discrepancy between the petitioner’s GSTR 1 and GSTR 3B returns. By such reply, the petitioner also requested for a personal hearing.
3. Learned counsel for the petitioner submits that in spite of making a express request for a personal hearing, a personal hearing was not provided before the impugned order was issued. He further submits that the petitioner had explained that there was a closing stock value of Rs.23,10,524/- and capital goods value of Rs.10,10,000/- and that these aspects were not taken into account while issuing the impugned order.
4. Mr. V. Prashanth Kiran, learned Government Advocate, accepts notice for the respondent. By referring to the impugned order, he points out that the tax demand was confirmed because the petitioner failed to submit supporting documents in respect of the explanation provided in the reply.
5. Sub-section (4) of Section 75 of the Tamil Nadu Goods and Services Tax Act, 2017 imposes the obligation of providing a personal hearing either when requested for or when an order adverse to the tax payer is proposed to be issued. In this case, in the reply dated 25.11.2023, the petitioner expressly requested for a personal hearing. Although the petitioner was unable to check the box pertaining to personal hearing while uploading such reply on the GST portal, the statutory obligation would not stand waived on that account. Therefore, the impugned order calls for interference.
Despite petitioners failure to check the box pertaining to personal hearing – Section 75 of the Tamil Nadu Goods and Services Tax Act, 2017 imposes the obligation of providing a personal hearing either when requested for or when an order adverse to the tax payer is proposed to be issued.
6. For reasons set out above, the order dated 29.12.2023 is quashed and the matter is remanded for re-consideration. The petitioner is permitted to submit all relevant documents within fifteen days from the date of receipt of a copy of this order. Upon receipt thereof, the respondent is directed to provide a reasonable opportunity to the petitioner, including a personal hearing, and thereafter issue a fresh order within two months from the date of receipt of documents from the petitioner.
7. W.P.No.8490 of 2024 is disposed of on the above terms. No costs. Consequently, W.M.P.Nos.9436 and 9440 of 2024 are closed.
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