Case Law Details
Tvl. Gayatri Granites Vs Assistant Commissioner (ST) (Madras High Court)
In the case of Tvl. Gayatri Granites Vs Assistant Commissioner (ST) before the Madras High Court, the petitioner challenged an order dated 16.08.2023, along with the consequential demand notice dated 17.08.2023, citing a breach of the principles of natural justice.
The petitioner, engaged in the business of supplying granite, sandstone, and related products, received a notice in Form ASMT 10 on 17.02.2023 after the examination of their returns. Subsequently, an intimation was sent on 25.03.2023, followed by a show cause notice on 20.06.2023. The impugned order was issued on 16.08.2023. The petitioner contended that they were unaware of these proceedings as the notices and orders were uploaded on the GST portal’s “View additional notices and order” tab but were not communicated through any other means.
The petitioner’s counsel argued that the confirmed tax proposal was based on a discrepancy between the petitioner’s GSTR 3B returns and the auto-populated GSTR 2A. They asserted that given an opportunity, they could explain this discrepancy and were willing to remit 10% of the disputed tax demand as a condition for remand.
The government advocate representing the respondent pointed out that the petitioner had been provided with sufficient opportunities, including a notice in Form ASMT 10, an intimation, and a show cause notice. Additionally, a personal hearing was offered on 30.06.2023.
The court observed that as a registered person under the GST enactments, the petitioner had an obligation to monitor the GST portal regularly. However, it also noted that the tax demand was confirmed because the petitioner failed to reply to the show cause notice and attend the personal hearing. Considering the overall circumstances, the court deemed it appropriate to provide the petitioner with an opportunity to contest the tax demand.
Consequently, the court set aside the impugned order dated 16.08.2023 and remanded the matter for reconsideration. The petitioner was directed to remit 10% of the disputed tax demand within a maximum period of two weeks from the receipt of the court’s order and to submit a reply to the show cause notice within the same period. Once the respondent received the petitioner’s reply and verified the remittance, they were instructed to provide a reasonable opportunity to the petitioner, including a personal hearing, and issue a fresh assessment order within three months.
The writ petition (W.P.No.10674 of 2024) was disposed of on these terms, with no costs incurred. Subsequently, related miscellaneous petitions (W.M.P.Nos.11764 and 11766 of 2024) were closed.
In essence, the court recognized the petitioner’s right to natural justice and granted them an opportunity to contest the tax demand, despite their failure to respond earlier, emphasizing the importance of fair procedure in such matters.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
An order dated 16.08.2023 and the consequential demand notice dated 17.08.2023 are challenged in this writ petition on the ground of breach of principles of natural justice.
2. The petitioner is engaged in the business of supplying granite, sandstone and related products. Upon examining the returns of the petitioner, notice in Form ASMT 10 was issued on 17.02.2023. This was followed by intimation dated 25.03.2023 and show cause notice dated 20.06.2023. The impugned order was issued thereafter on 16.08.2023. The petitioner asserts that he was unaware of proceedings since the notices and orders were uploaded in the “View additional notices and order” tab of the GST portal, but not communicated to the petitioner through any other mode.
3. Learned counsel for the petitioner submits that the confirmed tax proposal pertains to the mismatch between the petitioner’s GSTR 3B returns and the auto populated GSTR 2A. If provided an opportunity to contest the tax demand on merits, he submits that the petitioner would be in a position to explain the discrepancy. On instructions, he submits that the petitioner agrees to remit 10% of the disputed tax demand as a condition for remand.
4. Mrs.K.Vasanthamala, learned Government Advocate, accepts notice for the respondent. She points out that the petitioner was provided sufficient opportunities in the form of a notice in Form ASMT 10, an intimation and a show cause notice. She also points out that a personal hearing was offered on 30.06.2023.
5. As a registered person under applicable GST enactments, the petitioner is under an obligation to monitor the GST portal on an ongoing basis. Therefore, the explanation provided by the petitioner is not entirely convincing. At the same time, it should be noticed that the tax demand was confirmed only because the petitioner failed to submit a reply to the show cause notice and attend the personal hearing. In the overall facts and circumstances, albeit by putting the petitioner on terms, the interest of justice warrants that an opportunity be provided to the petitioner to contest the tax demand.
6. For reasons set out above, impugned order dated 16.08.2023 is set aside and the matter is remanded for reconsideration, subject to the condition that the petitioner remits 10% of the disputed tax demand as agreed to within a maximum period of two weeks from the date of receipt of a copy of this order. The petitioner is also permitted to submit a reply to the show cause notice within the aforesaid period. Upon receipt thereof and upon being satisfied that 10% of the disputed tax demand was received, the respondent is directed to provide a reasonable opportunity to the petitioner, including a personal hearing, and thereafter issue a fresh assessment order within a period of three months from the date of receipt of the petitioner’s reply.
7. W.P.No.10674 of 2024 is disposed of on the above terms. No costs. Consequently, W.M.P.Nos.11764 and 11766 of 2024 are closed.
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