Deepa Annamalai Distributors Vs Commercial Tax Officer (Madras High Court)
Madras High Court adjudicated on the writ petitions filed by Deepa Annamalai Distributors, a proprietary concern engaged in the gas cylinder supply business, against two orders dated August 24 and August 30, 2024. The petitioner challenged these orders on grounds of procedural violations under the GST Act and infringement of the principles of natural justice. Central to the dispute was a mismatch in the petitioner’s GSTR-1 and GSTR-3B returns for the financial year 2019-20, which led to tax, interest, and penalty demands totaling ₹33,24,832 in one order and ₹17,42,622 in the other.
The petitioner argued that the demands exceeded the limits specified in the respective show-cause notices (SCNs), violating Section 75(7) of the GST Act. Moreover, it was contended that both proceedings pertained to the same subject matter, raising concerns under Section 6(2) of the Act, which restricts overlapping assessments. On the other hand, the government counsel emphasized the petitioner’s non-participation in earlier proceedings and the validity of the orders.
After hearing both sides, the court quashed the impugned orders and directed the petitioner to deposit 10% of the disputed tax (₹9,00,166) within four weeks. Any amounts already paid were to be adjusted against this sum. Failure to comply with this condition would result in the restoration of the earlier orders. Additionally, the court instructed that recovery measures, such as bank account attachments, be withdrawn upon compliance with the payment directive.
The court further ordered that the impugned orders be treated as show-cause notices, granting the petitioner four weeks to submit objections with supporting documents. The respondent authorities were directed to consolidate the proposals and issue a single order for the period in question, ensuring adherence to natural justice principles.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
