Case Law Details
Tvl. V.K.D. Store Vs State Tax Officer/Commercial Tax Officer (Madras High Court)
Madras High Court set aside a GST assessment order against Tvl. V.K.D. Store for the assessment year 2018-19, citing improper service of notice. The petitioner, a registered taxpayer under the GST Act, argued that the discrepancy between GSTR-3B and GSTR-2A led to scrutiny under Section 61, followed by a notice issued in DRC-01. However, the petitioner claimed they were unaware of the proceedings as notices were uploaded only to the “additional notices and orders” tab on the GST portal without direct communication. As a result, they could not respond or participate in the hearing. Relying on a previous ruling in a similar case (M/s. K. Balakrishnan, Balu Cables), the petitioner sought a fresh opportunity to present their case, agreeing to deposit 25% of the disputed tax. The respondent did not object to this request.
The court ruled that the impugned assessment order be set aside, allowing the petitioner to present their objections. The petitioner was directed to deposit 25% of the disputed tax within four weeks, with any prior recoveries or pre-deposits being adjusted. Upon compliance, the impugned order would be treated as a show cause notice, and the petitioner would have four additional weeks to submit objections with supporting documents. If the conditions were not met, the original assessment order would stand restored. The court also ordered the withdrawal of any bank attachments or garnishee proceedings upon compliance. No costs were awarded in the case.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
The writ petition is filed challenging the impugned order dated 12.04.2024 for the assessment year 2018-19.
2. It is submitted by the learned counsel for the petitioner that the petitioner is registered under the Goods and Services Tax Act, 2017. During the relevant period 2018-19, the petitioner filed its returns and paid the appropriate taxes. There was a scrutiny of the returns under Section 61 of the Act, during the course of scrutiny of such scrutiny, it was noticed that there was a discrepancy between GSTR 3B and GSTR 2A.
3. It is submitted by the learned counsel for the petitioner that pursuant thereto, a notice in DRC-01 was issued on 29.12.2023 followed by reminder dated 04.04.2024 and personal hearing was fixed on 10.04.2024. However, the petitioner had neither filed its reply nor availed the opportunity for a personal hearing. 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 in “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 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.
4. 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 W.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.
5. 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 Government Advocate appearing for the respondent does not have any serious objection.
6. By consent of both parties, the writ petition stands disposed of on the following terms:
a) The impugned order dated 12.04.2024 is set aside.
b) The petitioner shall deposit 25% 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 25% of disputed taxes directed to be paid. The assessing authority shall then intimate the balance amount out of 25 % 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 25% 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 25% 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 25 % 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., 25% 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.
7. There shall be no order as to costs. Consequently, connected miscellaneous petitions are closed.
Author Bio
