Case Law Details
Krith Enterprises Vs State Tax Officer (FAC) (Madras High Court)
In the case of Krith Enterprises Vs. State Tax Officer (FAC), the Madras High Court addressed a Writ Petition seeking to quash the impugned order No.ZD331223281028O dated December 30, 2023, issued under Section 73 of the Central Goods and Services Tax (CGST) Act, 2017, and the corresponding Tamil Nadu Goods and Services Tax (TGST) Act for the fiscal year 2017-18. The petitioner contended that the order was passed without providing sufficient reasoning and that they were only given one opportunity for a personal hearing, contrary to the four hearings stipulated in Section 75(5) of the CGST Act. The petitioner argued that this limited opportunity deprived them of the ability to adequately defend against the charges due to notifications and orders being uploaded on a portal without proper visibility.
The respondent, represented by the Special Government Pleader, contended that the notices and orders were properly issued through the GST Portal, implying that the petitioner should not claim a breach of natural justice principles. However, the Court acknowledged the petitioner’s concerns regarding the lack of adequate personal hearing and the dismissal of their replies without proper consideration. Ultimately, the Madras High Court decided to set aside the impugned order, provided the petitioner deposits 10% of the disputed tax demand within four weeks of receiving a copy of the order. The Court directed that the matter be remitted back to the respondent for reconsideration, with the petitioner required to submit their reply within two weeks. Following this, the authorities were instructed to schedule a physical personal hearing and send a notice providing 14 days’ notice before issuing a new order based on merits and applicable laws.
This ruling emphasizes the importance of adhering to procedural fairness and natural justice in tax proceedings, ensuring that all parties have adequate opportunities to present their cases. The decision underscores the need for tax authorities to consider responses from taxpayers fully before reaching any conclusions, thereby reinforcing accountability in the administrative process. The Court’s instructions aim to ensure that the case is reconsidered fairly, aligning with the principles of justice in administrative proceedings.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
This Writ Petition is filed for the issuance of a Writ of Certiorari, to call for the records relating to the impugned order No.ZD331223281028O, dated 30.12.2023 passed by the respondent under Section 73 of the Central Goods and Service Tax Act, 2017, r/w the corresponding provision under the Tamil Nadu Goods and Services Tax Act, 2017, for the year 2017-18 and quash the same.
2. The learned counsel for the petitioner submits that the petitioner’s contentions were dismissed in the impugned order without any reason and only one personal hearing was afforded before the due date to file reply to the show cause notice instead of four personal hearings as per Section 75(5) of the Act. All the notices and order were uploaded in the portal and that too in “view additional notices and orders” and that is why the petitioner was not able to defend the case. Therefore, the order passed by the respondent is in violation of principles of natural justice. Hence, the order passed by the respondent may be set aside and remanded the matter to the respondent for reconsideration.
3. The learned Special Government Pleader for the respondent would submit that the notices and orders were issued through the GST Portal and hence, the Petitioner cannot complain of the breach of principles of natural justice. He also submits that in the event of deposit of 10% of the tax demand, the request of the petitioner may be considered.
4. Heard the learned counsel for the petitioner and the learned Special Government Pleader for the respondent and perused the materials placed before this Court.
5. Considering the fact that the petitioner was not provided sufficient opportunity of personal hearing and non consideration of the reply filed by the petitioner and the reasons stated by the petitioner are appears to be genuine, this Court is inclined to set aside the impugned order No.ZD331223281028O, dated 30.12.2023 and accordingly, the same is set aside on condition that the petitioner shall deposit 10% of the disputed tax demand to the respondent within a period of four (4) weeks from the date of receipt of a copy of this order. While setting aside the impugned order, this Court remits the matter back to the respondent for reconsideration. The petitioner is directed to file their reply within a period of two (2) weeks and on receipt of the reply filed by the petitioner, the authorities concerned shall fix a date for personal hearing by sending a physical notice to the petitioner providing 14 days time and thereafter, pass orders on merits and in accordance with law.
With the above directions, this Writ Petition is disposed of. There shall be no order as to costs. Consequently, the connected Miscellaneous Petitions are closed.
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