Legal Challenge Overturns Tax Credit Denial, Ensures Fair Hearing for Taxpayer with Procedural Safeguards and Merit-Based Review

HC quashed orders dated 17.08.2023 and 25.04.2024 related to input tax credit for motor vehicle purchases. The court found violation of natural justice principles, condoned delay in appeal filing, and directed Appellate Authority to provide fresh hearing opportunity to the petitioner, allowing substantive consideration of the case on merits without procedural constraints.

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Issues:
1. Quashing of orders dated 17.08.2023 and 25.04.2024 and seeking a personal hearing opportunity.
2. Alleged wrongful availing of input tax credit on the purchase of motor vehicles.
3. Violation of principles of natural justice due to lack of opportunity to substantiate the claim.
4. Dismissal of appeal by the Appellate Authority based on delay grounds.
5. Condonation of delay in filing the appeal and direction for a fresh hearing.

Analysis:
The petitioner, a registered dealer under the Tamil Nadu Goods and Services Tax Act engaged in textile manufacturing, challenged orders alleging wrongful input tax credit on motor vehicle purchases. The respondent confirmed the proposal, leading to an appeal dismissed by the Appellate Authority due to delay. The petitioner contended a lack of opportunity to present objections timely, violating natural justice principles. The court noted the absence of a reasonable chance for the petitioner to state their case and the dismissal of the appeal solely on delay grounds, prompting a decision to condone the delay in the interest of justice.

The court acknowledged the violation of natural justice principles in passing the order without allowing the petitioner to present their case adequately. The petitioner's inability to file objections promptly due to unawareness of the notice issued through the GST Portal was considered. The court emphasized the need for a fair opportunity for the petitioner to establish their case, leading to the decision to condone the delay in filing the appeal and direct the Appellate Authority to consider the appeal without limitation issues and decide it on merit after providing a reasonable hearing opportunity.

In conclusion, the court disposed of the writ petition by granting relief to the petitioner, emphasizing the importance of affording a fair chance to be heard and ensuring that the appeal process is conducted without constraints of delay. The decision to condone the delay and direct a fresh hearing without limitation issues reflects the court's commitment to upholding principles of natural justice and ensuring a just resolution in tax matters.

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