Case Law Details
Tvl.Sri Vasupujya Jewels Vs State Tax Officer (Madras High Court)
Madras HC directs Adjustment of amount recovered or paid including GST pre-deposit in Appeal towards requirement of payment of 10% Pre-deposit
Conclusion: Where any amounts recovered or paid, including pre-deposits made in Goods and Services Tax (GST) appeal, the same should be reduced or adjusted against the mandatory 10% pre-deposit requirement. Any recovery by way of attachment of Bank account or garnishee proceedings, the same should be lifted /withdrawn on complying with the condition viz., payment of 10% of the disputed taxes.
Held: Assessee was a registered taxpayer under the GST Act, 2017, contested discrepancies in their returns, including mismatches between GSTR-3B, GSTR-1, and GSTR-2A. Despite filing a response to a notice issued under Form GST DRC-01, the reply was rejected due to a lack of supporting documents. Assessee argued that assessment order and notices were uploaded only on the GST portal without proper service, depriving them of a fair opportunity to participate in the proceedings. Assessee had requested one final chance to address the discrepancies and relied on a prior judgment in Sree Manoj International vs. Deputy State Tax Officer, where the matter was remanded upon payment of 10% of the disputed taxes. Assessee expressed willingness to deposit 10% of the disputed amount, which was not opposed by Revenue. It was held that if any amount had been recovered or paid out of the disputed taxes, including by way of pre-deposit in appeal, the same would be reduced/adjusted, from/towards the 10% of disputed taxes directed to be paid. AO should then intimate the balance amount out of 10% of disputed taxes to be paid, if any, within a period of one week from the date of receipt of a copy of this order. Assessee should deposit such remaining sum within a period of three weeks from such intimation. The entire exercise of verification of payment, if any, intimation of the balance sums, if any, to be paid for compliance with the direction of payment of 10% of the disputed taxes, after deducting the sums already paid and payment by assessee of the balance amount, if any, on intimation in compliance with the above direction should be completed within a period of four weeks from the date of receipt of copy of this order. Failure to comply with the above condition viz., payment of 10% of disputed taxes within the stipulated period i.e., four weeks from the date of receipt of a copy of this order should result in restoration of the impugned order. Any recovery by way of attachment of Bank account or garnishee proceedings, the same should be lifted /withdrawn on complying with the above condition viz., payment of 10% of the disputed taxes.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
The present writ petition is filed challenging the impugned order passed by the respondent dated 30.08.2024 relating to the assessment year 2019-20.
2. The petitioner is a registered taxpayer under the Goods and Services Tax Act, 2017. During the relevant period of 2019-20, the petitioner filed its returns and paid the appropriate taxes. However, on verification of the petitioner’s monthly return, the following discrepancies were noticed viz.,
i. Output Mismatch between GSTR-3B and 1
ii. Input Mismatch between GSTR-3B and GSTR-2A.
2. Pursuant thereto, a notice in Form GST DRC-01 was issued on 14.09.2023, followed by reminder on 03.05.2024. In response, the petitioner had filed its reply on 10.05.2024. However, the reply has been rejected on the premise that the petitioner had failed to file any supportive documents to explain the alleged discrepancies. Hence, the impugned order came to be passed, confirming the proposal.
3. The impugned order is challenged on the premise 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 in the GST Portal, thereby, the petitioner was unaware of the initiated proceedings and was thus unable to participate in the adjudication proceedings.
4. It is 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. The learned counsel for the petitioner would then place reliance upon the recent judgment of this Court in the case of Sree Manoj International Vs. Deputy State Tax Officer in W.P.No.10977 of 2024 dated 25.04.2024, to submit that this court has remanded the matter back in similar circumstances subject to payment of 10% of the disputed taxes. It was further submitted that the petitioner is ready and willing to pay 10% 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 learned Additional Government Pleader appearing for the respondent does not have any serious objection.
5. By consent of both parties, the writ petition stands disposed of on the following terms:
a. The impugned order dated 08.2024 is set aside.
b. The petitioner shall deposit 10% of the disputed taxes as admitted by the learned counsel for the petitioner and the respondent, within a period of four weeks from the date of receipt of a copy of this order.
c. If any amount has been recovered or paid out of the disputed taxes, including by way of pre-deposit in appeal, the same would be reduced/adjusted, from/towards the 10% of disputed taxes directed to be paid. The assessing authority shall then intimate the balance amount out of 10% of disputed taxes to be paid, if any, within a period of one week from the date of receipt of a copy of this order. The petitioner shall deposit such remaining sum within a period of three weeks from such intimation.
d. The entire exercise of verification of payment, if any, intimation of the balance sums, if any, to be paid for compliance with the direction of payment of 10% of the disputed taxes, after deducting the sums already paid and payment by the petitioner of the balance amount, if any, on intimation in compliance with the above direction shall be completed within a period of four weeks from the date of receipt of copy of this order.
e. Failure to comply with the above condition viz., payment of 10% of disputed taxes within the stipulated period i.e., four weeks from the date of receipt of a copy of this order shall result in restoration of the impugned order.
f. If there is any recovery by way of attachment of Bank account or garnishee proceedings, the same shall be lifted /withdrawn on complying with the above condition viz., payment of 10% of the disputed taxes.
g. 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 (4) weeks from the date of receipt of a copy of this order along with supporting documents/material. If any such objections are filed, the same shall be considered by the respondent and orders shall be passed in accordance with law after affording a reasonable opportunity of hearing to the petitioner. It is made clear that if the above conditions viz., 10% of disputed taxes is not complied or objections are not filed within the stipulated period, four weeks respectively from the date of receipt of a copy of this order, the impugned order of assessment shall stand restored.
6. There shall be no order as to costs. Consequently, connected miscellaneous petitions are closed.
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