Case Law Details
Prakash Fabricators & Electricals Vs Assistant Commissioner (ST)(FAC) (Madras High Court)
In a recent ruling, the Madras High Court addressed a petition filed by Prakash Fabricators & Electricals against an order imposing a late fee and penalty for failing to file annual returns and a reconciliation statement on time. The court set aside the impugned order and remanded the matter for reconsideration, offering the petitioner an opportunity to contest the charges on their merits. This article delves into the details of the case, the court’s observations, and the implications of the judgment.
Prakash Fabricators & Electricals challenged an order dated 13.02.2023, which imposed a late fee and penalty for not filing their annual returns and reconciliation statement within the stipulated time frame. The petitioner claimed that they were unable to participate in the proceedings leading to the impugned order because their Chartered Accountant, who was entrusted with GST compliance, had overlooked the show cause notice and the subsequent order.
The petitioner’s counsel argued that the late fee component in the impugned order amounted to Rs.1,54,800/-, and contended that the petitioner had already remitted Rs.1,64,000/-. The petitioner sought an opportunity to contest the matter on merits, emphasizing that the failure to participate in the earlier proceedings was not deliberate but due to an oversight by their Chartered Accountant.
Mr. T. N. C. Kaushik, the learned Additional Government Pleader, accepted notice on behalf of the first respondent. He maintained that the principles of natural justice had been followed, as the petitioner was issued an intimation on 20.08.2022, a show cause notice on 23.11.2022, and was offered a personal hearing.
The court noted that the petitioner had failed to file objections to the show cause notice. However, considering the petitioner’s assertion that their non-participation was due to unawareness of the proceedings, the court found that the interest of justice warranted reconsideration. The court took into account the fact that the petitioner had remitted the entire late fee portion.
In light of the above observations, the Madras High Court set aside the impugned order dated 13.02.2023 and remanded the matter for reconsideration. The court allowed the petitioner to submit a reply to the show cause notice within fifteen days from the date of receipt of a copy of the court’s order. Furthermore, the court directed the first respondent to provide the petitioner with a reasonable opportunity, including a personal hearing, and to issue a fresh order within three months from the date of receipt of the petitioner’s reply.
The Madras High Court’s decision to set aside the penalty order for GST non-compliance and allow the petitioner to contest the charges reflects the court’s commitment to ensuring fair legal processes. By acknowledging the petitioner’s reasons for non-participation and remanding the matter for reconsideration, the court has provided a fair opportunity for the petitioner to present their case.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
An order dated 13.02.2023 imposing late fee and penalty for non filing of annual returns and reconciliation statement in time is challenged in this writ petition. The petitioner asserts that he was unable to participate in proceedings culminating in the impugned order because GST compliances were entrusted to a Chartered Accountant and such Chartered Accountant had not noticed the show cause notice and impugned order.
2. Learned counsel for the petitioner submits that the late fee component in the impugned order is Rs.1,54,800/-. As against this, she submits that a sum of Rs.1,64,000/- was remitted by the petitioner. She seeks an opportunity to contest the matter on merits.
3. Mr. T. N. C. Kaushik, learned Additional Government Pleader, accepts notice for the first respondent. He submits that principles of natural justice were complied with by issuing intimation dated 20.08.2022, show cause notice dated 23.11.2022 and by offering a personal hearing.
4. On examining the impugned order, it is evident that the tax payer fail to file objections to the show cause notice. By taking into account the assertion that such non participation was on account of not being aware of proceedings, the interest of justice warrants reconsideration especially by taking into account that the entire late fee portion was remitted by the petitioner.
5. For reasons set out above, impugned order dated 13.02.2023 is set aside and the matter is remanded for reconsideration. The petitioner is permitted to submit a reply to the show cause notice within fifteen days from the date of receipt of a copy of this order. The first respondent is directed to provide a reasonable opportunity to the petitioner, including a personal hearing, and thereafter issue a fresh order within three months from the date of receipt of the petitioner’s reply.
6. W. P. No. 16729 of 2024 is disposed of on the above terms. No costs. Consequently, W.M.P.Nos.18379, 18380 and 18381 of 2024 are closed.
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