Facts of the Case

The petitioner, Tvl. Singarammal Construction, a partnership firm engaged in civil works and represented by its partner John Arumugam, challenged proceedings passed by the State Tax Officer, Aranthangi Assessment Circle, Pudukkottai District, the second respondent, bearing GSTIN 33ABUFS5858D1ZP/2020-21, and the consequent order in Form GST DRC-07 (Reference No. ZD330423089304J) dated 19 April 2023. The petitioner contended that the impugned order was passed in gross violation of the principles of natural justice and in violation of the statutory provisions governing assessment proceedings under the GST enactments, and sought a writ of certiorarified mandamus calling for the records relating to the impugned proceedings and quashing the order, along with a direction to the second respondent to redo the assessment afresh, on merits, after affording the petitioner an opportunity of personal hearing. The matter was filed as W.P(MD) No. 25986 of 2023, together with connected miscellaneous petitions W.M.P.(MD)Nos. 22360 and 22363 of 2023, before the Madurai Bench of the Madras High Court, and came up for final hearing before Justice G.R. Swaminathan, who heard the counsel for the petitioner and the learned Additional Government Pleader for the respondents, disposing of the matter on 26 October 2023.

Issues Involved

  1. Whether the impugned assessment order in Form GST DRC-07 dated 19 April 2023 was passed without issuing notice to the petitioner, in violation of the principles of natural justice.
  2. Whether such an order, passed without reasonable opportunity to the taxpayer, was liable to be set aside and the matter remanded for fresh adjudication on merits.
  3. Whether the second respondent ought to be directed to afford the petitioner a fresh opportunity of personal hearing before passing any order on remand.

Petitioner's Arguments

  • The impugned assessment order was passed without notice to the petitioner, denying it any opportunity to respond before the adverse order was issued.
  • The order was passed in gross violation of the principles of natural justice and in violation of the statutory provisions governing GST assessments.
  • The matter ought to be remanded to the second respondent to redo the assessment afresh, on merits, after affording the petitioner an opportunity of personal hearing.

Respondent's Arguments

  • The Additional Government Pleader appeared for the respondents; the recorded order does not disclose any substantive defence of the impugned assessment on the specific ground of absence of notice to the petitioner.
  • No serious contest was pressed against remand for fresh adjudication once the Court noted, on a bare perusal of the impugned order, the want of notice to the petitioner prior to its passing.

Court Order/Findings

  • The Court found, on a mere look at the impugned order, that it had been passed without notice to the petitioner, and since the petitioner was not given reasonable opportunity, the order was liable to be set aside.
  • The matter was remanded to the file of the second respondent, the State Tax Officer, Aranthangi Assessment Circle, to pass a fresh order on merits and in accordance with law after hearing the petitioner.
  • The writ petition was allowed with liberty to the second respondent to proceed afresh, without costs, and the connected miscellaneous petitions were closed as a consequence.

Important Clarification

A GST assessment order in Form DRC-07 passed without issuing notice to the taxpayer is liable to be set aside on the short ground of denial of reasonable opportunity, without the Court entering into the merits of the underlying tax demand; the matter is to be remanded for a fresh order after due notice and hearing.

Sections Involved

  • Provisions governing issuance of notice and assessment procedure under the Central Goods and Services Tax Act, 2017 and Tamil Nadu Goods and Services Tax Act, 2017.
  • Form GST DRC-07 under the CGST Rules, 2017 — summary of the order of assessment/demand.

Decision – In Favour of

The decision favours the Assessee. The impugned assessment order was set aside for want of notice, and the matter remanded for fresh adjudication with an opportunity of personal hearing, though the substantive tax demand itself remains to be examined afresh by the department.

Related Case Laws

No directly on-point case notes are currently published on this site.

Case Details

  • Court: Madras High Court, Madurai Bench
  • Case No.: W.P(MD) No.25986 of 2023
  • CNR: Not available
  • Coram: Justice G.R. Swaminathan
  • Decision Date: 26 October 2023
  • Disposal Nature: Writ petition allowed, order set aside and remanded

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