Court quashes Assessment Order for violating natural justice, directs reconsideration

The Court found that the Assessment Order violated principles of natural justice by not granting a personal hearing to the petitioner and failing to consider the petitioner's contentions regarding the NCLAT's order. Consequently, the Court quashed the Assessment Order and directed the respondent to reconsider the matter, ensuring adherence to natural justice principles and granting a personal hearing to the petitioner within twelve weeks. The consequential recovery notice was also quashed in line with the Assessment Order's quashing.

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Issues:
Challenge to Assessment Order and Recovery Notice based on non-application of mind, lack of personal hearing, violation of principles of natural justice.

Analysis:
1. The petitioner challenged the Assessment Order and consequential recovery notice based on several grounds. Firstly, it was argued that the Assessment Order was erroneous due to the respondent's failure to consider a moratorium order passed by the NCLAT, similar to one under the Insolvency and Bankruptcy Code. The petitioner had explicitly referred to this order in their replies, but it was allegedly ignored in the Assessment Order.
2. Another contention was the lack of a personal hearing, which was requested by the petitioner but not granted, violating Section 75(4) of the Tamil Nadu Goods and Services Tax Act, 2017. The petitioner claimed that the Assessment Order was passed in violation of the principles of natural justice.
3. The petitioner's counsel highlighted the NCLAT's order, emphasizing that the Assessment Proceedings should not have proceeded in light of the moratorium order. The order was compared to a moratorium order under the Insolvency and Bankruptcy Code, 2016, indicating that the Assessment Order was procedurally incorrect.
4. The respondent argued that the petitioner had an alternative statutory appellate remedy available and contended that the NCLAT's order was not equivalent to a moratorium order under the Insolvency and Bankruptcy Code. The respondent maintained that the NCLAT's order was based on the Companies Act, 2013, not the Insolvency and Bankruptcy Code.
5. The respondent also disputed the relevance of a Calcutta High Court judgment cited by the petitioner, asserting that it did not apply to the present case as there were no Corporate Insolvency Resolution Process proceedings pending against the petitioner. The respondent argued that the Assessment Proceedings were not required to be stayed based on the NCLAT's order.
6. Ultimately, the Court found that the Assessment Order violated principles of natural justice by not granting a personal hearing to the petitioner and failing to consider the petitioner's contentions regarding the NCLAT's order. The Court quashed the Assessment Order and directed the respondent to reconsider the matter, ensuring adherence to natural justice principles and granting a personal hearing to the petitioner within twelve weeks. The consequential recovery notice was also quashed in line with the Assessment Order's quashing.

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