2021 (10) TMI 331 - HC - VAT and Sales Tax

Violation of principles of natural justice - Validity of revision orders - notice not served to petitioner - impugned orders have been passed without giving personal hearing - HELD THAT - It is deemed appropriate to make it clear that the impugned order in the senior WP, which has been made under CST Act is under Section 12 of CST Act read with Section 9(2A) of CST Act, whereas, impugned order in junior WP has been made under Section 12 per se of TNGST Act. To this extent, paragraph 3 of the previous proceedings shall stand corrected. Reverting to the core issue i.e., issue captured in the previous proceedings, learned Revenue counsel, on instructions submits that the first notice dated 11.12.2020 was returned 'unserved' and to the second notice dated 08.03.2021, writ petitioner did respond citing the Covid-19 situation and sought time - there is no disputation that the first notice dated 11.12.2020 was made available to the writ petitioner only on 27.07.2021 post impugned order. In the case on hand, there is no disputation that there was no affixure much less affixure in the conspicuous place at his last known place of business/residence qua writ petitioner. Therefore, there was no service of notice as far as the 11.12.2020 notice is concerned. Impugned orders being orders are set aside solely on the ground that pre order notices have not been served in accordance with TNGST Rules - petition disposed off.

Summary

Issues:
1. Service of notices under CST Act and TNGST Act.
2. Compliance with TNGST Rules for serving notices.
3. Impugned orders set aside due to lack of proper service of pre-order notices.
4. Directions for the respondent to commence proceedings afresh.

Analysis:
1. The judgment concerns two writ petitions, referred to as senior WP and junior WP, challenging orders made under CST Act and TNGST Act for the assessment year 2004-2005. The impugned orders were issued without proper service of pre-order notices to the writ petitioner, leading to a request for a copy of the notice dated 11.12.2020, which was only provided post the impugned orders.

2. The core issue revolved around the service of notices as per the Tamil Nadu General Sales Tax Rules, 1959 (TNGST Rules). The court clarified that TNGST Rules are applicable to proceedings under both CST Act and TNGST Act. Rule 52(1)(d) of the TNGST Rules specifies the modes of service, including affixing the notice at the last known place of business or residence if other modes are not practicable.

3. It was established that the notice dated 11.12.2020 was not served on the writ petitioner as there was no affixure at the last known place of business or residence. Consequently, the impugned orders dated 30.06.2021 were set aside solely due to the lack of proper service of pre-order notices, without expressing any opinion on the merits of the case.

4. The judgment directed the respondent to commence the proceedings afresh, ensuring proper service of notices in accordance with the prescribed procedure. The respondent was instructed to conclude the proceedings expeditiously within twelve weeks from the judgment date, emphasizing the importance of adherence to procedural requirements in legal proceedings.

In conclusion, the High Court of Madras ruled in favor of the writ petitioner, highlighting the significance of serving notices in compliance with the TNGST Rules and setting aside the impugned orders due to procedural irregularities. The judgment focused on upholding the principles of natural justice and procedural fairness in legal proceedings, emphasizing the need for proper service of notices to ensure a fair and transparent process.