goods and service tax
This blog examines a significant legal case adjudicated by the Madras High Court concerning a State Tax Officer in Chennai who issued a show cause notice following an inspection. The taxpayer contested the impartiality of the investigating officer who also presided over the adjudication process. The legal challenge centered on alleged breaches of natural justice principles.
On January 29, 2024, the State Tax Officer issued a show cause notice following an inspection. The taxpayer subsequently raised objections, primarily contesting the dual role of the officer who conducted both the inspection and adjudication.
The taxpayer argued that it was inappropriate for the inspecting officer to lead the adjudication. Despite these objections, the State Tax Officer issued a show cause notice under Section 73, which included a personal hearing scheduled with the same officer.
In response, the taxpayer filed a writ petition, asserting that having the same officer adjudicate the case violated the principles of natural justice. The Revenue acknowledged this oversight and referenced a state circular mandating the transfer of the case to a different officer.
The Madras High Court resolved the writ petition by confirming the violation of fundamental standards of justice. The court mandated that assessment proceedings be conducted by an officer other than the one who issued the show cause notice.
Subsequently, the assessment proceedings were reassigned to Mr. Sridharan, Assistant Commissioner, ensuring adherence to the circular and promoting neutrality in the adjudication.
The petitioner is instructed to file a response to the show cause notice via the GST portal, with an explicit stipulation that no proceedings will be undertaken by the investigating officer.
This case underscores the critical importance of impartiality in adjudicative processes, reinforcing the Madras High Court's position on adhering to principles of natural justice. The court's directive establishes a clear precedent for future cases, highlighting the necessity for an unbiased adjudicating authority in GST-related matters.