The Madras High Court has quashed a Goods and Services Tax ( GST ) assessment order issued prematurely by GST authorities that is 10 days expiration of the time limit for filing reply, citing a breach of statutory timelines and the principles of natural justice.
During the proceedings, Justice Krishnan Ramasamy noted the submissions from both sides and found that the department had acted hastily, issuing the order 10 days before the deadline, without waiting for the petitioner’s reply. Furthermore, no personal hearing was conducted, which is a vital component of procedural fairness in adjudication.
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Mold-Tek Packaging Ltd challenged the assessment order dated 30.12.2023, which was through a writ petition. It was argued that the order was issued 10 days before the expiration of the time limit provided for filing a reply to a show cause notice, thus violating the legal requirement for a fair opportunity to respond.
The petitioner was served with a show cause notice in FORM DRC-01 on 11.12.2023, which allowed a 30-day period to submit a reply. This reply was due by 10.01.2024. However, the authorities proceeded to pass the impugned order on 30.12.2023, without waiting for the full response period to elapse.
The petitioner’s counsel contended that this premature issuance of the order deprived the petitioner of the opportunity to defend themselves or attend a personal hearing, a clear breach of the principles of natural justice.
The bench stated that the principles of natural justice mandate a reasonable opportunity for the affected party to present their case before any adverse order is passed. It reiterated that orders passed in violation of these principles, especially when statutory timelines are ignored, are inherently void and liable to be quashed.
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Thus, the High Court set aside the GST assessment order, declaring it invalid due to its premature issuance and non-compliance principles of natural justice. The matter was remanded back to the tax authorities for fresh consideration.
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