The Madras High Court has remanded a GST order for reconsideration due to the absence of a mandatory personal hearing, as required by Section 75(4) of the Goods and Services Tax ( GST ) Act.
M/s. Vaduvambikai Enterprises challenged an order issued by the State Tax Officer without a personal hearing. Represented by P. Rajkumar, the petitioner submitted that the petitioner was a registered person under the Tamil Nadu Value Added Tax Act, 2006. The tax was deducted at source while making payments to the petitioner, and the petitioner is entitled to transition such TDS into the GST regime and take credit for the same.
By referring to the impugned order, the petitioner argued that the order, proposing a tax demand of Rs. 6,65,396/-, was issued without complying with the legal requirement of providing a personal hearing.
The petitioner has also placed on record a show cause notice, which refers to a personal hearing being offered to the petitioner.
“However, a subsequent show cause was issued on 20.09.2023 in respect of the same tax proposal. This show cause notice does not refer to a personal hearing. The impugned order was issued in December 2023 after the show cause notice dated 20.09.2023. On examining the impugned order, there is no reference to a personal hearing being offered. Under sub-section 4 of Section 75 of applicable GST enactments, a personal hearing is mandatory either if requested for or if an order adverse to the taxpayer is proposed to be issued. This case falls within the latter category,” the petitioner added.
Justice Senthilkumar Ramamoorthy emphasised the mandatory nature of personal hearings under Section 75(4) of the GST Act. The court noted that the absence of a personal hearing in cases where an adverse order against the taxpayer is proposed violates procedural fairness.
The Madras High Court set aside the order and remanded the matter for reconsideration. The petitioner was granted fifteen days to submit a reply to the show cause notice dated December 5, 2022. The State Tax Officer was directed to provide a reasonable opportunity, including a personal hearing, and issue a fresh order within three months of receiving the petitioner’s reply.
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