Case: Procandour Automotive Systems Private Limited v. Commercial/State Tax Officer, Oragadam, Sriperumbudur Station, Chennai
Court: Madras High Court
Petition No.: W.P. No. 12117 of 2024 & W.M.P. Nos. 13215 and 13217 of 2024
Date of Judgment: 18.03.2025
Relevant Section: Section 73 of the CGST/TNGST Act, 2017
Category of Dispute: Input Tax Credit – Violation of principles of natural justice
Facts (Para 4–5)
The petitioner, Procandour Automotive Systems Pvt. Ltd., a registered manufacturer of weighing machineries, was subjected to an audit under Section 65 of the TNGST Act, 2017 for FY 2017–18. The audit pointed out certain alleged defects such as differences in ITC between GSTR-2A and GSTR-3B, ITC on building and transport services, and employee-related expenses. The petitioner duly filed replies on 28.10.2023, 21.11.2023, 29.11.2023, and 18.12.2023 against the show cause notice in Form DRC-01 dated 28.09.2023.
Despite these replies, the assessing officer issued the order in Form DRC-07 dated 30.12.2023 determining tax liability under Section 73, without affording any personal hearing or referring to the objections filed by the petitioner. This prompted the writ petition seeking quashing of the assessment.
Questions for Consideration (Para 4–6)
Whether the assessment order dated 30.12.2023 passed under Section 73 of the CGST/TNGST Act was legally sustainable when the officer failed to consider the petitioner’s detailed written replies and did not grant an opportunity of personal hearing.
Observations (Para 6–7)
The Hon’ble Court observed that the impugned order did not contain any reference to the replies filed by the petitioner, showing clear non-application of mind. The absence of consideration of such replies and denial of personal hearing amounted to gross violation of the principles of natural justice.
The respondent’s counsel fairly conceded before the Court that the authority was willing to redo the assessment after giving due opportunity of hearing.
Judgment (Para 8–9)
The Court held that the assessment order suffered from non-application of mind and violation of natural justice. Accordingly, the order dated 30.12.2023 was set aside, and the matter was remanded back to the respondent to re-do the assessment after considering the petitioner’s objections and affording a reasonable opportunity of personal hearing.
The writ petition was disposed of without costs, and connected miscellaneous petitions were closed.
Table – Cases Referred
| S. No. | Case Name | Citation/Forum | Ratio Decidendi / Verdict |
|---|---|---|---|
| 1 | None cited in the order | — | The case turns on principles of natural justice; no precedent cited. |
Between Fine Lines – Trade/Industry Takeaway
This ruling reinforces that assessment orders under Section 73 or 74 of the GST Act must reflect application of mind and discuss the taxpayer’s submissions in detail. Orders passed without considering replies or denying a personal hearing are liable to be quashed. Taxpayers should ensure that all replies are duly acknowledged and insist upon a hearing before finalization of any GST audit or adjudication proceedings.
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