Case Law Details
Sree Manoj International Vs Deputy State Tax Officer (Madras High Court)
Madras High Court set aside the original GST order dated March 1, 2024, against Manoj International, citing a breach of natural justice principles. The petitioner claimed unawareness of the proceedings as the notices and orders were uploaded only on the GST portal without any alternative communication. The case revolved around a tax discrepancy between the petitioner’s GSTR-3B returns and the auto-populated GSTR-2A, specifically regarding the IGST paid on imports. The petitioner argued that the IGST component was overlooked in the assessment and sought an opportunity to clarify the discrepancy. The court noted the failure to respond to the show cause notice but acknowledged the petitioner’s claim of no actual discrepancy.
The court conditionally set aside the order, requiring the petitioner to remit 10% of the disputed tax within two weeks. The petitioner was also permitted to submit a reply to the show cause notice. Upon compliance, the tax department must provide a reasonable opportunity, including a personal hearing, before issuing a fresh order within three months. The court disposed of the petition on these terms and closed the associated miscellaneous petitions.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
An order in original dated 01.03.2024 is assailed on the ground of breach of principles of natural justice.
2. The petitioner states that he was unaware of proceedings until recently since the notices and order were uploaded in the GST portal and not communicated to the petitioner through any other mode. The present writ petition was filed in the said facts and circumstances.
3. Learned counsel for the petitioner submits that the confirmed tax proposal pertains to the alleged discrepancy between the petitioner’s GSTR 3B returns and the auto-populated GSTR 2A. In relation thereto, he submits that the IGST paid in relation to imports is reflected in the GSTR 2A, but that the same was not taken into consideration. If provided an opportunity, he submits that the petitioner would be in a position to explain the discrepancy to the satisfaction of the respondent. On instructions, he submits that the petitioner agrees to remit 10% of the disputed tax demand as a condition for remand.
4. Mr. Prashanth Kiran, learned Government Advocate, accepts notice for the respondent. By inviting my attention to the impugned order, he points out that the impugned order was preceded by an intimation, a show cause notice and three reminders in respect of personal hearings.
5. On perusal of the impugned order, it is evident that the tax proposal pertaining to a mismatch between the GSTR 3B returns of the petitioner and the auto-populated GSTR It is also clear that the tax liability was confirmed because the petitioner failed to reply to the show cause notice. The petitioner asserts that there is no discrepancy and that the IGST component was not taken into consideration. In these circumstances, albeit by putting the petitioner on terms, the matter requires reconsideration.
6. Therefore, the impugned order dated 01.03.2024 is set aside subject to the condition that the petitioner remits 10% of the disputed tax demand as agreed to within a period of two weeks from the date of receipt of a copy of this order. Within the aforesaid period, the petitioner is also permitted to submit a reply to the show cause notice. Upon receipt of the petitioner’s reply and upon being satisfied that 10% of the disputed tax demand was received, the respondent is directed to provide a reasonable opportunity to the petitioner, including a personal hearing, and thereafter issue fresh order within a period of three months from the date of receipt of the petitioner’s reply.
7. W. P.No.10977 of 2024 is disposed of on the above terms. No costs. Consequently, W.M.P.Nos.12061 and 12062 of 2024 are closed.
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