2021 (9) TMI 1040 - HC - GST

Validity of assessment proceedings - applicability of Section 75 of TN Goods and ST Act - opportunity of hearing not provided - violation of principles of natural justice - HELD THAT - A plain, but careful reading of the sub-section (4) of Section 75 and the language in which it is couched, makes it clear that opportunity of hearing to the person chargeable with tax is statutorily imperative not only when such person makes a specific request in writing, but also when an adverse decision is contemplated against such person and these two situations are put together in sub-section (4) by connecting the two by 'or'. In other words, these two are not conjunctive and they have not been put together by using the conjunction 'and'. It follows as a sequitur that in cases where an adverse decision is contemplated, it is statutorily imperative to give an opportunity of hearing under Section 75(4) of TN Goods and ST Act. A perusal of the impugned order in the case on hand makes it clear that it is adverse to the writ petitioner as it proceeds on the basis that writ petitioner has suppressed transactions and more importantly, penalty has also been levied. Therefore, the argument that the opportunity of hearing was not given as the writ petitioner, who is the person chargeable with tax, has not chosen to make a written request, does not hold water. Impugned order made by the first respondent is set aside solely on the ground that there is a breach of sub-section (4) of Section 75 of TN Goods and ST Act - petition disposed off.

Summary

Issues involved:
Opportunity of hearing under Section 75(4) of TN Goods and ST Act not granted before making the impugned order.

Analysis:
The judgment revolves around the challenge to an order dated 18.10.2019, questioning the lack of opportunity of hearing before its issuance. The Assessing Officer failed to specify the relevant provisions, Statutes, and Rules in the order, leading to ambiguity. The petitioner argued that Section 75 of TN Goods and ST Act mandates granting an opportunity of hearing, which was not provided in this case. The Revenue counsel contended that such an opportunity is required only upon a written request by the person chargeable with tax, which was absent here.

The Court examined Section 75(4) of TN Goods and ST Act, emphasizing that an opportunity of hearing is mandatory when an adverse decision is contemplated, irrespective of a written request. The judgment clarified that the impugned order, which imposed penalties on the petitioner for alleged transaction suppression, constituted an adverse decision necessitating a hearing. Therefore, the failure to grant a hearing violated statutory requirements.

Consequently, the Court set aside the impugned order due to the breach of Section 75(4) of TN Goods and ST Act. It refrained from expressing any opinion on the case's merits and directed the Assessing Officer to conduct a fresh assessment, ensuring compliance with the statutory provision. The Court scheduled a personal hearing and mandated the issuance of a new order within a specified timeframe. The writ petition was disposed of with these directives, with no costs imposed on either party.