Non-Consideration of Additional Reply and Hearing Request: Madras HC quashes TNGST Order [Read Order]

The Madras High Court ( HC ), in a recent case, quashed an order passed under Tamil Nadu Goods and Services Tax Act, 2017 ( TNGST Act ) noting that the said order was passed without considering the additional reply and hearing request made by the petitioner, which is violative of principles of natural justice.

The case in question is a writ petition filed under Article 226 of the Constitution of India, which empowers the High Courts to issue directions, orders, or writs to any person or authority, including the government, for enforcement of fundamental rights and for any other purpose.

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The petitioner, Gen Engineering Works, represented by Mr. H.S. Hredai, sought the issuance of a Writ of Certiorari to quash the impugned order dated 29.04.2024, issued by the respondent, Assistant Commissioner (ST), under Section 73 of the TNGST Act, 2017. The order, according to the petitioner, was passed in violation of the principles of natural justice and are thus illegal, arbitrary, and beyond the respondent's jurisdiction.

The backdrop of the case stems from the issuance of a show-cause notice to the petitioner by the respondent on 28.12.2023, pertaining to certain tax-related matters under the TNGST Act.

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In response, the petitioner submitted a reply on 07.02.2024, addressing the concerns raised in the notice. Additionally, the petitioner filed an additional reply on 24.04.2024, in which a specific request for a personal hearing was made to clarify the issues further. The main point of the petitioner's grievance lied in the fact that despite submitting the additional reply and requesting a personal hearing, the impugned order was passed by the respondent on 29.04.2024 without considering the additional reply or granting an opportunity for a personal hearing.

During the hearing of the writ petition, the petitioner’s counsel, Mr. H.S. Hredai drew attention to the fact that the failure to consider the additional reply and the denial of a personal hearing constituted a violation of the principles of natural justice.

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The principles of natural justice require that every party in a legal dispute should be given a fair opportunity to present their case. In this instance, the petitioner had explicitly requested a personal hearing, yet the respondent proceeded to pass the impugned order without adhering to this request. This omission, according to the petitioner, made the order illegal and liable to be quashed.

On the other hand, the counsel for the respondent, Mr. T.N.C. Kaushik, who is the Additional Government Pleader (Taxes), acknowledged that an opportunity for a personal hearing had been provided to the petitioner on 05.04.2024. However, he pointed out that this opportunity was offered before the petitioner had filed the additional reply on 24.04.2024.

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Therefore, while the respondent had technically fulfilled the requirement of offering a personal hearing, it did so before the petitioner had submitted the additional reply, which was a crucial part of the petitioner’s defense. Given this timeline, the counsel suggested that the Court could pass an appropriate order, and the respondent would comply with it.

Upon hearing the arguments from both sides, the single bench of Justice Krishnan Ramaswamy took into consideration the sequence of events and the submissions made.

It observed that while the respondent had issued a show-cause notice and the petitioner had filed a reply on 07.02.2024, the additional reply submitted on 24.04.2024 was not considered when the impugned order was passed. More importantly, the petitioner’s request for a personal hearing, made explicitly in the additional reply, was also ignored. The Court noted that these oversights violated the principles of natural justice, which require that all relevant submissions and requests from the parties be considered before an order is passed. In this case, the failure to take into account the additional reply and the request for a personal hearing amounted to a procedural lapse.

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The Court highlighted that any order passed in violation of the principles of natural justice is legally unsustainable. Such an order is considered non est in law, meaning it is invalid and has no legal effect. Consequently, the Court ruled in favor of the petitioner and quashed the impugned order.

In its final order, the Court remanded the matter back to the respondent for reconsideration. The respondent was directed to provide the petitioner with an opportunity for a personal hearing, ensuring that at least 14 clear days' notice is given before the hearing.

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The respondent was also instructed to take into account both the reply and the additional reply filed by the petitioner, as well as the oral submissions made during the personal hearing, before passing a fresh and detailed order. With this, the writ petition was disposed of, and the connected miscellaneous petition was also closed, with no costs awarded to either party.

To Read the full text of the Order CLICK HERE

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