Case Law Details
Tvl. R. Jayaramakrishnan Vs Deputy State Tax Officer – 1 (Madras High Court)
Conclusion: In a dispute of taxable supplier’s discrepancy in the Goods and Services Tax Returns (GSTR) – 3B and the form 26AS under Section 203AA of Income Tax Act, 1961, High Court had granted final hearing on 25% pre-deposit after providing a reasonable opportunity for hearing.
Held: Assessee was registered under GST Act, had its original GSTIN cancelled in September 2018 and was later assigned a new GSTIN in September 2019. Assessee had filed its monthly returns in GSTR-1 and GSTR-3B through the common portal. Assessee argued that a show cause notice was issued on 22.08.2023, followed by a personal hearing on 22.09.2023, but assessee neither filed a reply nor attended the hearing. Assessee submitted that neither the show cause notices nor the impugned order of assessment had been served on assessee by tender or sending it by RPAD, instead it had been uploaded under the field “Additional Notices and Orders” tab on the GST Portal, thereby, assessee was unaware of the initiated proceedings and was thus unable to participate in the adjudication proceedings. Assessee was provided with an opportunity, they would be able to explain the alleged discrepancies that there has been significant differences in the comparison of taxable suppliers reported by assessee through GSTR-3B monthly to compare with Form 26AS – Annual statement under section 203AA of the income tax Act, 1961 for the financial year 2019-2020. It was also contended that there were discrepancies between the taxable suppliers reported in the GSTR-3B returns and the Form 26AS under Section 203AA of the Income Tax Act, leading to a difference of Rs.77,10,000 in turnover for 2019-2020. This resulted in taxes of Rs.6,93,900 under CGST and Rs.6,93,900/- under SGST besides interest and penalties. It was held that assessee was required to deposit 25% of the disputed tax within two weeks of receiving the order. On compliance with the pre-deposit, the impugned assessment order was directed to be treated as a show cause notice, and assessee must submit objections within four weeks, along with supporting documents. The GST department was required to consider these objections and pass orders in accordance with the law after providing a reasonable opportunity for hearing.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
Mr. T.N.C. Kaushik, learned Additional Government Pleader (Tax) takes notice on behalf of the respondents. With the consent of both parties, this writ petition is taken up for final disposal at the admission stage itself.
2. The present writ petition is filed challenging the impugned order passed by the first respondent dated 19.06.2024 relating to the assessment year 2019-20.
3. The petitioner is engaged in the business of Goods Transport The petitioner is a registered dealer under Goods and Services Act, 2017 GSTIN:33AMQPJ7931H1ZS validity from 09.07.2017. The said GSTIN was cancelled by the State Tax Officer (Circle), Paramour with effect from 20.09.2018. Upon cancellation of STIN:33AMQPJ7931H1ZS, the petitioner got new registration certificate in GSTIN:33AMPJ793 1H2ZR washroom 19.09.2019. The monthly returns in Form GSTR-1 and Form GSTR-3B were furnished by the petitioner electronically through common portal.
4. Learned counsel appearing for the petitioner submitted that a show cause notice was served upon the petitioner in Form GST DRC-01 dated 08.2023 by the first respondent. Further, personal hearing was offered on 22.09.2023. However, the petitioner had neither filed its reply nor availed the opportunity for a personal hearing. Hence, the impugned order came to be passed.
5. It is submitted by the learned counsel for the petitioner that neither the show cause notices nor the impugned order of assessment has been served on the petitioner by tender or sending it by RPAD, instead it had been uploaded under the field “Additional Notices and Orders” tab on the GST Portal, thereby, the petitioner was unaware of the initiated proceedings and was thus unable to participate in the adjudication proceedings. It is further submitted by the learned counsel for the petitioner that if the petitioner is provided with an opportunity, they would be able to explain the alleged discrepancies that there have been significant differences in the comparison of taxable suppliers reported by the petitioner through GSTR-3B monthly to compare with Form 26AS – Annual statement under section 203AA of the income tax Act, 1961 for the financial year 2019-2020. The first respondent arrived at a net difference of turnover for the year 20 19-2020 of Rs.77,10,000/- and imposed taxes of Rs.6,93,900/- under CGST and Rs.6,93,900/- under SGST besides interest and penalty are imposed thereon.
6. The learned counsel for the petitioner would place reliance upon the recent judgment of this Court in the case of M/s. K.Balakrishnan, Balu Cables vs. O/o. the Assistant Commissioner of GST & Central Excise in P.(MD)No.11924 of 2024 dated 10.06.2024, to submit that this Court has remanded the matter back in similar circumstances subject to payment of 25% of the disputed taxes.
7. It was further submitted that the petitioner is ready and willing to pay 25% of the disputed tax and that they may be granted one final opportunity before the adjudicating authority to put forth their objections to the proposal, to which the learned Additional Government Pleader appearing for the respondents does not have any serious objection.
8. In view thereof, the impugned order passed by the first respondent 9.06.2024 is hereby set aside and this Court is inclined to pass the following orders:
a) The petitioner shall deposit 25% of the disputed tax within a period of two weeks from the date of receipt of a copy of this order.
b) On complying with the above condition, the impugned order of assessment shall be treated as show cause notice and the petitioner shall submit its objections within a period of four weeks from the date of receipt of a copy of this order along with supporting documents/material.
c) If any such objections are filed, the same shall be considered by the respondents and orders shall be passed in accordance with law after affording a reasonable opportunity of hearing to the petitioner.
d) If the above deposit is not paid or objections are not filed within the stipulated period, i.e., two weeks and four weeks respectively from the date of receipt of a copy of this order, the impugned order of assessment shall stand revived.
Accordingly, the Writ Petition stands disposed of with the above observations and directions. There shall be no order as to costs. Consequently, connected miscellaneous petitions are closed.
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