The Madras High Court in the case SKS Builders and Promoters Versus Assistant Commissioner (ST) observed and has held that the personal hearing should be granted in all the matters which being prior to the finalization of assessments, except in the cases where the stand of the assessee is being intended to be accepted by the department.
The Single judge bench headed by Justice Anitha Sumanth in the case observed that the officer has grossly erred in proceeding for finalizing the assessment in violation of the principles of natural justice.
In the present case, the petitioner or assessee company being in business of civil construction and is registered under the provisions of the Tamil Nadu Goods and Services Tax Act, 2017. In the said case the petitioner participated in government tenders and is also a subcontractor engaged in activities subcontracted by the main contractors as a consequence of contracts which is entered into by the former with the government.
Therefore, the petitioner was also being awarded a subcontract for the construction of a new division office for the Tamil Nadu Housing Board. Thus, the assessment was being made back-to-back contract under an agreement dated 25.11.2020. The value of the main contract between the contractor and the Housing Board was for an amount of Rs. 8,20,04,631 whereas his agreement was for an amount of Rs. 7,86,99,262.
The petitioner claim in the plea is an avowed entitlement to the benefit of the notification dated June 28, 2017, wherein granting the benefits of the concessional rate of composite supply of works contract to a subcontractor of the main contractor who provides services to the central or the State Government, the Union Territories, the Local Authorities, the government authorities, or government entities.
It has been asked by the petitioner for hearing in person prior to the issue being decided. The officer has brushed aside the request for a personal hearing, instead proceeding for passing the order without hearing the petitioner.
However, it has been stated that Section 75(4), which deals with the general procedure to be followed in the determination of tax, specifically mandates that an opportunity for a hearing shall be granted where a request is received in writing from the person chargeable to tax or penalty or where any adverse decision is being contemplated as against such a person.
Accordingly, the court held that the personal hearing had not been fixed and that there being a gross flaw in the order.
