Madras HC Quashes GST Order Due to No Personal Hearing

Tvl. Zen Machine Tools Vs State Tax Officer (Madras High Court)

The Madras High Court set aside a GST order against Tvl. Zen Machine Tools, issued on 20.07.2023, due to the absence of a personal hearing, which violated principles of natural justice. The petitioner was unaware of notices uploaded on the GST portal, leading to a failure to respond in time. The respondent admitted that no opportunity for a personal hearing was provided before issuing the order. The court remanded the case back to the tax authorities for fresh consideration, with the condition that the petitioner pays 10% of the disputed amount within two weeks. The court instructed the petitioner to submit their objections and necessary documents within two weeks after payment. The authorities were directed to provide a personal hearing before passing a new order. Additionally, the court lifted the bank account attachment issued on 15.02.2024, ordering its release by the respondent within two weeks of receiving the court’s order. The writ petition was disposed of without costs, and all related miscellaneous petitions were closed.

Cash was argued by Advocate Rupesh Sharma for Petitioner

FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT

This writ petition has been filed challenging the impugned proceedings dated 20.07.2023 passed by the 1^st respondent.

2. Mr. V. Prashanth Kiran, learned Government Advocate, takes notice on behalf of the respondents 1 and 2. By consent of the parties, the main writ petition is taken up for disposal at the admission stage itself.

3. The learned counsel for the petitioner would submit that all notices/communications were uploaded by the respondent under the column, viz., “View Additional Notices and Orders”, in the GST portal. Since the petitioner was not aware of the said notices, they failed to file their reply within the time. Under these circumstances, the impugned order came to be passed by the respondent without providing any opportunity of personal hearing to the petitioner.

4. On the other hand, the learned Government Advocate would submit that the respondent has uploaded the notices in the GST Online Portal. But the petitioner failed to avail the said opportunity. Further, he has fairly admitted that no opportunity of personal hearing was provided to the petitioner prior to the passing of impugned order. Therefore, he requested this Court to remit the matter back to the respondent, subject to the payment of 10% of the disputed amount by the petitioner.

5. Heard the learned counsel for the petitioner and the learned Government Advocate for the respondent and also perused the materials available on record.

6. In the present case, it appears that no opportunity of personal hearing was provided to the petitioner prior to the passing of impugned order. Hence, this Court is of the view that the impugned order was passed in violation of principles of natural justice. In such view of the matter, this Court is inclined to set aside the impugned order dated 20.07.2023 passed by the respondent. Accordingly, this Court passes the following order:-

(i) The impugned order dated 20.07.2023 is set aside and the matter is remanded to the respondent for fresh consideration on condition that the petitioner shall pay 10% of disputed amount to the respondent within a period of two weeks from today (09.08.2024) and the setting aside of the impugned order will take effect from the date of payment of the said amount.

(ii) The petitioner shall file their reply/objection along with the required documents, if any, within a period of two weeks thereafter.

(iii) On filing of such reply/objection by the petitioner, the respondent shall consider the same and pass appropriate orders on merits and in accordance with law, after providing an opportunity of personal hearing to the petitioner, as expeditiously as possible.

(iv) Considering the fact that the impugned order itself has been quashed, this Court is of the opinion that the bank attachment notice dated 15.02.2024 cannot survive any longer and hence, the same is lifted. As a sequel, the 1^st respondent is directed to release the attachment on the bank account of the petitioner held with the 3^rd respondent-Bank, within a period of two weeks from the date of receipt of a copy of this order.

7. With the above directions, this writ petition is disposed of. No costs. Consequently, the connected miscellaneous petitions are also closed.