GST Order Issued Without Hearing U/S75(4): Madras HC Directs for Reconsideration

The Madras High Court has remanded a GST order for reconsideration because of the absence of a mandatory personal hearing, as mandated under Section 75(4) of the Goods and Services Tax (GST) Act.

M/s. Vaduvambikai Enterprises contested an order issued via the State Tax Officer without a personal hearing. Represented by P. Rajkumar, the applicant furnished that the applicant was a registered person under the Tamil Nadu Value Added Tax Act, 2006. The tax was deducted at the source at the time of making payments to the applicant, and the applicant is qualified to transition such TDS into the GST regime and take credit for it.

Via referring to the impugned order, the applicant claimed that the order, asking a tax demand of Rs 6,65,396, was issued without complying with the legal provision of providing a personal hearing.

The applicant has placed a SCN on record which directed to the personal hearing being proposed to the applicant. However, a next SCN was issued dated 20.09.2023 concerning the identical tax proposal. The same SCN is not directed to the personal hearing. After the show cause notice on 20.09.2023, the impugned order was issued in December. After analyzing the impugned order, no reference to a personal hearing being proposed.

A personal hearing is mandatory under sub-section 4 of Section 75 of applicable GST legislation, whether requested for or if an order adverse to the taxpayer is offered to be issued. This matter drops within the latter category,” the applicant stated.

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U/s 75(4) of the GST Act Justice Senthilkumar Ramamoorthy highlighted the mandatory nature of personal hearings. The court learned that procedural fairness breaches via the lack of a personal hearing for the matters where an adverse order against the assessee is offered.

The Madras High Court has set aside the order and remanded the case for reconsideration. The applicant was allotted 15 days to respond to the SCN on December 5, 2022. The State Tax Officer was asked to furnish a reasonable chance, including a personal hearing, and issue a fresh order within 3 months of obtaining the response of the applicant.