2020 (8) TMI 922 - HC - GST

High Court quashes orders due to procedural violation

The High Court of Madras found a violation of procedural requirements under Section 75(4) of the Tamil Nadu Goods and Service Tax Act 2017. The impugned ... Opportunity of hearing under Section 75(4) of the Tamil Nadu Goods and Service Tax Act, 2017 - personal hearing notice issued prior to receipt and consideration of explanation - contemplation of an adverse decision after application of mind - quashing and remittal for fresh considerationOpportunity of hearing under Section 75(4) of the Tamil Nadu Goods and Service Tax Act, 2017 - personal hearing notice issued prior to receipt and consideration of explanation - contemplation of an adverse decision after application of mind - Whether issuance of personal hearing notice prior to receipt and consideration of the assessee's written explanation complied with the requirement of Section 75(4) and whether the impugned orders could stand. - HELD THAT: - Section 75(4) requires that an opportunity of hearing be granted where a request is received in writing from the person chargeable or where any adverse decision is contemplated against such person. The statutory stage for issuing a personal hearing arises after the authority has received and applied its mind to the explanation and, upon such consideration, contemplates an adverse decision. Issuing a personal hearing notice before receipt and prima facie consideration of the explanation does not satisfy the statutory requirement. The impugned orders, having been passed without compliance with this requirement, suffer from infirmity and cannot be sustained. The proper course is to quash those orders and remit the matters for fresh consideration, with the authority first considering the explanation, issuing a personal hearing notice as required, and thereafter passing orders in accordance with law. [Paras 4, 5]Impugned orders quashed; matters remitted to the respondents to consider the petitioners' explanations, issue personal hearing notices in accordance with Section 75(4), and pass fresh orders thereafter.Final Conclusion: Writ petitions allowed; impugned orders quashed and remitted for fresh consideration with directions to issue personal hearing notices and pass orders in accordance with law; no costs. Issues: Violation of procedural requirements under Section 75(4) of the Tamil Nadu Goods and Service Tax Act 2017Analysis:The judgment delivered by the High Court of Madras addresses the issue of procedural compliance under Section 75(4) of the Tamil Nadu Goods and Service Tax Act 2017. The petitioners had submitted their replies to show cause notices on 29.02.2020, and the impugned orders were passed on 02.03.2020. The petitioners' counsel highlighted that Section 75(4) mandates granting an opportunity of hearing where an adverse decision is contemplated against the person chargeable with tax or penalty. The Court emphasized that the authority must apply their mind after receiving the explanation and provide an opportunity of hearing only if they contemplate an adverse decision. It was noted that issuing a personal hearing notice before considering the explanation does not comply with the statutory requirements.The Court found a clear violation of the procedural requirement under Section 75(4) in this case. Consequently, the orders impugned in the writ petitions were quashed, and the writ petitions were allowed. The matters were remitted to the respondents for passing fresh orders in accordance with the law. The Court directed the respondents to issue a personal hearing notice to the petitioners before passing fresh orders. The judgment concluded by stating that no costs were to be awarded, and the connected miscellaneous petitions were closed.