Tax Assessment Order Nullified for Procedural Lapses: Authority Directed to Ensure Fair Hearing and Proper Document Review

HC quashed tax assessment order due to violation of natural justice principles. The court found procedural irregularities in the tax authority's order, lacking proper scrutiny of documents and denying personal hearing. Order was remanded for fresh consideration, directing the authority to provide personal hearing and follow regulatory guidelines within twelve weeks.

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Issues:
Challenge to Assessment Order under Tamil Nadu Goods and Services Tax Act, 2017 on grounds of violation of principles of natural justice.

Analysis:
The petitioner challenged the Assessment Order, contending that due to medical ailments, he couldn't respond to the show cause notice issued by the respondent. Medical certificates supported his claim of suffering from diabetes, Coronary Artery disease, and acute chest pain. The petitioner argued that the respondent erroneously concluded an input tax mismatch and excess input tax claim without verifying documents as per Section 16 of the TNGST Act, 2017. The petitioner also highlighted that the Annual Return for the year 2018-19 showed reversed input tax credit, indicating a lack of scrutiny by the respondent.

The petitioner emphasized the absence of a personal hearing before the Assessment Order was passed, alleging a violation of natural justice. Referring to a Circular by the Commercial Taxes Department, the petitioner argued that specific documents should have been scrutinized before the Assessment Order. The Court noted discrepancies in the Assessment Order, indicating a failure to adhere to the Circular's instructions, leading to a lack of compliance with natural justice principles.

The Court concluded that the Assessment Order lacked clarity on adherence to the Circular's requirements, highlighting a non-speaking order concerning the petitioner's Annual Return. Consequently, the Court quashed the Assessment Order and remanded the matter to the respondent for fresh consideration within twelve weeks. The respondent was directed to provide a personal hearing to the petitioner, adhere to natural justice principles, and strictly follow the Circular's instructions for a fair and lawful reconsideration of the case.

In summary, the Court found the respondent's Assessment Order to be deficient in procedural fairness and legal compliance, necessitating a fresh review with proper adherence to principles of natural justice and regulatory guidelines.

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