2021 (9) TMI 1047 - HC - GST

Violation of principles of natural justice - Filing of Form Tran-1 regarding ITC - validity of SCN which preceded the impugned order - petitioner was not given an opportunity to meet/show cause what has been put against the writ petitioner - HELD THAT - The impugned order does not mention the provision of law under which it has been made as a caption, but there is a mention about Section 73 of TN Goods ST Act in the body of the impugned order. However, this Court is informed without any disputation or disagreement that the impugned order has been made inter alia under Section 73 of TN Goods ST Act. There is no disputation or disagreement before this Court that Section 75 of TN Goods ST Act which is captioned 'General provision relating to determination of tax' applies to case on hand more so as adverse decision qua writ petitioner has been made. Impugned order is set aside solely on the ground that PH which is statutorily imperative under Section 75(4) of TN Goods ST Act has not been given though the order is adverse to writ petitioner - it is made clear that no opinion or view has been expressed in this order on the merits of the matter as the impugned order has been set aside solely on the ground that PH that is statutorily imperative has not been given - petition allowed.

Summary

Issues:
Migration from TNVAT to TN Goods ST Act, Natural Justice Principles (NJP) violation in the impugned order, Show Cause Notice (SCN) vagueness, absence of personal hearing (PH) before the impugned order, consideration of writ petitioner's objections, statutory requirement of PH under Section 75(4) of TN Goods ST Act.

Migration from TNVAT to TN Goods ST Act:
The writ petitioner migrated from TNVAT to TN Goods ST Act, with Input Tax Credit (ITC) and Tran-1 being crucial aspects. The focus shifted to the Natural Justice Principles (NJP) as a statutory requirement embedded in the TN Goods ST Act, influencing the entire writ petition.

Violation of Natural Justice Principles (NJP) in the Impugned Order:
The writ petitioner argued that the Show Cause Notice (SCN) preceding the impugned order was vague, leading to a lack of opportunity to respond adequately. Additionally, the absence of a personal hearing (PH) before the adverse impugned order violated the statutory imperative of NJP, as outlined in Section 75(4) of the TN Goods ST Act.

Consideration of Writ Petitioner's Objections:
The writ petitioner raised concerns post the impugned order, highlighting various points on merits in a communication to the respondent. The Revenue counsel acknowledged the objections but clarified that no personal hearing was recorded, although the objections were considered before the impugned order.

Statutory Requirement of Personal Hearing (PH) under Section 75(4) of TN Goods ST Act:
The Court emphasized the statutory importance of granting a personal hearing under Section 75(4) of the TN Goods ST Act, especially when an adverse decision is made against the taxpayer. The absence of a personal hearing led to the dislodgement of the impugned order, setting it aside solely on the grounds of non-compliance with the statutory requirement of PH.

Directive and Disposition:
The Court ordered the impugned order to be set aside due to the lack of a personal hearing, directing the respondent to redo the entire exercise de novo within twelve weeks. The respondent was permitted to issue an additional Show Cause Notice (SCN) and consider the writ petitioner's post-order objections in the fresh decision-making process. The writ petition was allowed, and the connected Writ Miscellaneous Petitions were disposed of without costs.