Madras HC: Before Placing A GST Order, It Is Mandatory to Have a Personal Hearing Opportunity

A.H. Enterprises Vs Deputy Commercial Tax Officer (Madras High Court)

The Madras High Court in a significant judgment, in the case of A.H. Enterprises vs. Deputy Commercial Tax Officer [Writ Petition No. 35894 of 2023 dated January 04, 2024], highlighted the mandatory need to furnish a personal hearing under Section 75 of the Tamil Nadu Goods and Service Tax Act, 2017 (TNGST Act) before passing a tax order. The Hon’ble Madras High Court held that it is mandatory to provide the personal hearing under Section 75 of the Tamil Nadu Goods and Service Tax Act, 2017 (“the TNGST Act”) before passing an Order.

Facts for A.H. Enterprises

A.H. Enterprises (“the Petitioner”) was asked to pay a sum of INR 2,58,597/- for the difference between returns filed in form GSTR 1 and form GSTR 3B including both interest and penalty vide Order dated October 11, 2023 (“Impugned Order”).

The applicant argued that the Impugned Order was issued without furnishing a chance of a personal hearing as mandated by Section 75 of the TNGST Act.

The Deputy Commercial Tax Officer (“the Respondent”) argued that the demand for the Impugned Order is the difference between the returns filed in form GSTR-1 and form GSTR 3B along with interest and penalty and the case might be remanded for reconsideration.

Therefore the petition was filed via the applicant to challenge the impugned notice.

Madras High Court Order

It is important to furnish a chance for a personal hearing before the issuance of an order by the authority?

Held:

The Madras High Court in Writ Petition No. 35894 of 2023 held as under:

Decided that under Section 75 of the TNGST Act, it is obligatory to afford the Petitioner a Personal Hearing before the issuance of the Challenged Order.

Ordered that the Respondent grant a Personal Hearing to the Petitioner and subsequently issue a well-founded order within a maximum period of four weeks from the date of receiving a copy of this directive. Consequently, the Challenged Order was annulled and sent back for reevaluation.

Closure: This pronouncement by the Madras High Court underscores the significance of adhering to procedural prerequisites, particularly the mandatory provision of a personal hearing under Section 75 of the TNGST Act, before rendering a tax order. Taxpayers are advised to take cognizance of this judgment to ensure the preservation of their entitlement to a fair hearing in tax-related proceedings.