Procedural lapses and non-adherence to the principles of natural justice: ₹ 48 Crore GST Demand Quashed by Madras HC
In a landmark ruling in TMF Business Services Limited vs. State Tax Officer & Anr, the Madras High Court has quashed assessment orders involving a collective demand exceeding ₹48 crores against TMF Business Services Limited due to procedural lapses and non-adherence to the principles of natural justice.
Key Highlights of the Judgment:
Violation of Section 75(4) of the CGST Act:
The statutory mandate requiring a personal hearing was not adhered to. Despite reminder notices including a column for specifying the date and time for hearings, these were left blank.
False Hearing Dates in Assessment Orders:
The impugned orders falsely indicated that hearings were conducted on May 3, 2024, and May 15, 2024, whereas no such records were evident.
Ignored Explicit Requests for Hearing:
The Petitioner had requested an extension for filing replies to the SCNs and explicitly sought a personal hearing. These requests were overlooked.
HC Directions:
1 The quashed orders are to be treated as Show Cause Notices (SCNs).
2 The Petitioner has been directed to file objections within two weeks.
3 Revenue is to conduct fresh adjudication, ensuring compliance with the law and granting the Petitioner a reasonable opportunity for a personal hearing.
Implications for Taxpayers:
This decision reiterates the importance of:
1 Adherence to procedural safeguards: Authorities must follow statutory mandates, especially regarding personal hearings.
2 Judicial oversight: Courts continue to safeguard taxpayers’ rights when procedural lapses occur.
3 Timely objections: Taxpayers must remain vigilant and promptly challenge any procedural violations.
This ruling sets a precedent for ensuring fairness and accountability in tax adjudication.
The Copy of the order is as under:
