D.S.Engineering Vs Deputy State Tax Officer-2 (Madras High Court)
Engineering filed a writ petition challenging a GST order issued by the Deputy State Tax Officer-2, arguing that it violated principles of natural justice. The company, engaged in machinery and engineering component trading, had filed its GST returns and paid taxes for the 2019-20 period. However, a discrepancy was found between their GSTR 3B and GSTR 2A filings. The tax officer had issued multiple notices, including Form DRC01A and DRC01, along with a reminder, but received no response from DS. Engineering. Consequently, the officer issued an order confirming the proposed tax assessment.
The petitioner’s counsel argued that DS. Engineering was willing to explain the mismatch if given an opportunity and cited a recent Madras High Court judgment in a similar case, where the court remanded the matter for reconsideration upon the petitioner depositing 10% of the disputed tax. The counsel for DS. Engineering expressed their client’s readiness to comply with this condition. The Madras High Court, noting the lack of a proper hearing, set aside the impugned order. The court directed DS. Engineering to deposit 10% of the disputed tax within four weeks. Upon compliance, the original assessment order would be treated as a show-cause notice, and the company would be allowed four weeks to file its objections with supporting documents. The court instructed the tax officer to consider these objections and pass a fresh order after providing a reasonable hearing. Failure to deposit the required amount or file objections within the stipulated time would result in the original assessment order being reinstated.
