Right to hearing required before confirming tax, interest or penalty; matter remitted for fresh adjudication after opportunity to reply.

An assessment confirming tax, interest and penalty based on alleged excess input tax credit determined by comparing return filings was quashed and remitted because material factual questions-notably whether the IGST credit was actually utilized-remained unresolved and the affected person was not afforded a meaningful opportunity to reply or be heard. The proper legal approach requires fresh adjudication addressing utilization of credit, interest liability and penalty only after receipt and consideration of the taxpayer's documents and oral/written submissions; recovery proceedings are to be kept in abeyance pending de novo decision.

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Issues: Whether the impugned order passed confirming tax, interest and penalty under Section 73 of the TNGST Act, 2017 without adequate adjudication and opportunity of hearing is sustainable, and whether the matter should be remitted for de novo consideration.

Analysis: The impugned order confirmed tax, interest and penalty on account of alleged excess availing of input tax credit based on comparisons of GSTR-3B and GSTR-2A/2B and recorded that no reply or personal hearing response was received. The order, however, does not conclusively establish whether the alleged IGST credit was utilized and records the absence of clarity on utilization. The statutory scheme invoked includes determination of tax under Section 73, levy of interest under Section 50, and the provision in Section 75(9) regarding interest liability. Given the factual uncertainty as to utilization of the credit and the procedural posture in which the order was passed, an opportunity to file a reply with supporting documents and an opportunity of hearing are necessary before a final adjudication on tax, interest and penalty can be made. Remittal for fresh consideration enables a reasoned decision after hearing and proper ascertainment of utilization and related facts.

Conclusion: The impugned order is quashed and the matter is remitted for fresh decision on merits after affording the taxpayer an opportunity to file a reply with documents and to be heard; recovery proceedings are to be kept in abeyance pending de novo proceedings.

Ratio Decidendi: An assessment/order determining tax, interest and penalty under Section 73 of the TNGST Act, 2017 that proceeds without resolving material factual questions regarding input tax credit utilization and without providing the affected person a fair opportunity to reply and be heard is liable to be quashed and remitted for fresh adjudication.

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