2021 (5) TMI 601 - HC - GST

Court sets aside assessment orders, emphasizes natural justice principles in tax proceedings

ARSK Hardwares & Traders Versus The State Tax Officer, Legal and Revision (Intelligence), The State Tax Officer (ST) (Int.), Madurai

The court allowed the Writ Petitions, setting aside the assessment orders and remanding the matters for fresh orders. The court directed the first ... Violation of principles of natural justice - validity of ex-parte assessment orders of the 1st respondent - Section 75(4) and 126(3) of the TNGST Act - HELD THAT:- The impugned order of assessment has been passed on 07.02.2020, whereas personal hearing has been on 03.12.2020, after much latter the impugned order of assessment made, which clearly shows non-application of mind on the part of the 1st respondent. Even the Deputy Commissioner (ST)(Int), Madurai, has filed an appeal under Section 107 of TNGST Act, before the Appellate Deputy Commissioner (Appeal), Goods and Service Tax, Madurai, as against the above said assessment orders passed by the 1st respondent, dated 07.02.2020, pointing out certain deficiency. In such view of the matter, no doubt in my mind that there is total non-application of mind on the part of the 1st respondent in passing the impugned order of assessment, dated 07.02.2020. In the considered opinion of this Court, the petitioner is entitled to be heard in person, before the order of assessment was made. The matters are remanded back to the 1st respondent to pass fresh orders, after affording an opportunity of personal hearing to the petitioner - Petition allowed by way of remand. Issues:- Validity of the assessment order passed by the first respondent in GSTIN for multiple tax periods.- Allegations of the assessment being illegal, violating natural justice, and contrary to the provisions of the Tamil Nadu Goods and Service Tax Act, 2017.- Non-application of mind by the first respondent in passing the assessment order without affording the petitioner a reasonable opportunity of being heard.- Applicability of principles of natural justice and the right to personal hearing in assessment proceedings.Analysis:1. Validity of Assessment Order:The petitioners filed Writ Petitions seeking the issuance of a Writ of Certiorari to quash the impugned assessment orders passed by the first respondent for the tax periods 2017-18, 2018-19, and 2019-20. The petitioners alleged that the assessment orders were illegal, violated natural justice, and were contrary to the provisions of the Tamil Nadu Goods and Service Tax Act, 2017. The petitioners contended that the first respondent did not provide a reasonable opportunity for the petitioners to be heard before passing the assessment orders.2. Non-Application of Mind:The petitioners argued that the assessment order was passed on 07.02.2020, while the notice for personal hearing was issued on 31.12.2020, indicating a lack of application of mind by the first respondent. The Deputy Commissioner (ST)(Int), Madurai, also filed appeals pointing out deficiencies in the assessment orders. The court observed that there was a clear non-application of mind by the first respondent in passing the assessment order without affording the petitioners a proper opportunity of being heard.3. Principles of Natural Justice and Right to Personal Hearing:The learned counsel for the petitioners cited judgments emphasizing the importance of providing a personal hearing to the assessee before finalizing an assessment order. The court referred to previous decisions where it was held that the assessing authority must give the assessee an opportunity of personal hearing when requested. Based on these principles, the court concluded that the petitioners were entitled to be heard in person before the assessment orders were made.4. Court's Decision:After hearing arguments from both sides and examining the records, the court found merit in the petitioners' contentions. The court allowed the Writ Petitions, setting aside the impugned assessment orders and remanding the matters back to the first respondent for fresh orders. The court directed the first respondent to pass fresh orders after affording the petitioners an opportunity of personal hearing. The court mandated that this process should be completed within four weeks from the date of receipt of the court's order, without imposing any costs on the petitioners.In conclusion, the judgment highlighted the importance of adhering to principles of natural justice, particularly the right to a personal hearing, in assessment proceedings under the tax laws. The court's decision emphasized the need for assessing authorities to apply their minds judiciously and afford assessees a fair opportunity to present their case before finalizing assessment orders.