RB Traders v Deputy Commercial Tax Officer (Madras High Court)

Madras HC held that passing an order without providing an opportunity for a personal hearing is contrary to the principles of natural justice. Accordingly, order set aside and directed to give the petitioner an opportunity to establish his case on merits.

Facts- This writ petition has been filed by the petitioner challenging the order dated 01.04.2024 passed by the first respondent and seeking direction to the second and third respondents to unfreeze the bank account of the petitioner. The petitioner contends that all the notices/communications have been uploaded in the “Additional Notices Column” of the GST portal. However, the petitioner, being a small business, was not aware of the notices uploaded on the GST portal.

Conclusion- It was held that the respondent has passed the impugned orders herein without affording the petitioner an opportunity to be heard personally and, therefore, the same constitutes a violation of the principles of natural justice. According to the petitioner, they had already paid around 90% of the tax to the concerned authority. Thus, this Court is of the opinion that it is just and necessary to give the petitioner an opportunity to establish his case on merits and in accordance with law. Accordingly, the order herein challenged is set aside.

FULL TEXT OF THE MADRAS HIGH COURT JUDGMENT/ORDER

This writ petition has been filed by the petitioner challenging the order dated 01.04.2024 passed by the first respondent and seeking direction to the second and third respondents to unfreeze the bank account of the petitioner.

2. Amirta Poonkodi Dinakaran, learned Government Counsel (Taxation), takes note of the same on behalf of the first and second respondents.

3. With the consent of the parties, the main request is taken for decision at the very stage of admission.

4. The learned counsel for the petitioner submits that all the notices/communications have been uploaded in the “Additional Notices Column” on the GST portal. However, the petitioner, being a small business, was not aware of the notices uploaded on the GST portal. Furthermore, their consultant, on whom the petitioner relied for GST compliance, did not communicate on the procedure, which prevented the petitioner from filing a response within the stipulated time. By doing so, without giving any opportunity to the petitioner, the respondent passed the impugned order, which amounts to violation of the principles of natural justice. The learned counsel also submits that the petitioner had already deposited around 90% of the tax with the concerned authority.

5. I have heard the learned Government Counsel (Taxes) appearing for respondents 1 and 2, who presented her arguments supporting the orders impugned herein.

6. It is clear from the pleadings and documents filed before this Court that the respondent has passed the impugned orders herein without affording the petitioner an opportunity of being heard personally and, therefore, the same amounts to violation of the principles of natural justice . . According to the petitioner, they had already paid around 90% of the tax to the concerned authority.

7. In view of the above, the Court is of the opinion that it is just and necessary to give the applicant an opportunity to establish his case on merits and in accordance with law. Accordingly, the order herein challenged is set aside. Accordingly, the garnishment ordered by the second respondent will be lifted. The plaintiff shall file his response/objection along with required documents, if any, to the defendant within two weeks from the date of receipt of a copy hereof. On filing of such reply/objection by the petitioner, the respondent shall consider the same after issuing a clear notice of 14 days fixing the date of personal hearing and thereafter pass appropriate orders on merits and in accordance with the law, as quickly as possible.

8. With the above directions, the writ petition is disposed of without costs.

Accordingly, the related miscellaneous petitions are closed.