2020 (8) TMI 900 - HC - VAT and Sales Tax

Principles of natural justice - grant of opportunity of hearing, when request is received in writing from the person chargeable with tax or penalty, or where any adverse decision is contemplated against such person - Section 75(4) of the Tamil Nadu Goods and Service Tax Act 2017 - HELD THAT - A reading of Section 75(4) of TNGST Act shows that after the explanation is received from the writ petitioners, the authority must apply their mind and if they contemplate an adverse decision, then they must provide an opportunity of hearing. Therefore, issuing a personal hearing notice even prior to the receipt of the explanation cannot be said to be compliance of the aforesaid statutory requirements. That stage would arise only after the authority prima facie considers the explanation and contemplates an adverse decision. Since there is a clear violation of the aforesaid requirement, the orders impugned in the writ petitions stand quashed and the writ petitions are allowed. The matters are remitted to the file of the respondents to pass orders afresh in accordance with law - appeal allowed by way of remand.

Summary

Issues involved: Violation of procedural requirements under Section 75(4) of the Tamil Nadu Goods and Service Tax Act 2017 leading to quashing of impugned orders and remittance for fresh orders.

In this judgment, the main issue revolved around the violation of procedural requirements under Section 75(4) of the Tamil Nadu Goods and Service Tax Act 2017. The petitioners had submitted their replies to show cause notices before the impugned orders were passed, indicating a lack of compliance with the statutory provision. The court highlighted that Section 75(4) mandates granting an opportunity of hearing after receiving a written request or contemplating an adverse decision against the person chargeable with tax or penalty. The authority must apply their mind and provide a personal hearing notice only if they contemplate an adverse decision after considering the explanation. The court emphasized that issuing a personal hearing notice before receiving the explanation does not fulfill the statutory requirements.

The judgment concluded by quashing the impugned orders due to the clear violation of Section 75(4) and remitting the matters back to the respondents for fresh orders in compliance with the law. The court directed the respondents to issue a personal hearing notice to the petitioners and pass fresh orders accordingly. No costs were awarded, and the connected miscellaneous petitions were closed as a result of the decision.