GST Assessment Set Aside as Order Passed Without Hearing: Madras HC Directs Fresh Order

NNV Enterprises Vs Deputy State Tax Officer-I (Madras High Court)

The writ petition challenged an assessment order dated 31.05.2023, whereby the proposal in the show cause notice (Form GST DRC-01 dated 24.01.2023) for the tax period 2021–22 was confirmed due to non-submission of a reply by the petitioner. The impugned order confirmed tax and penalty demands aggregating to ₹9,43,952, comprising ₹4,71,976 each under SGST and CGST, with no amount initially paid.

It was noted that the entire disputed tax and penalty had subsequently been recovered from the petitioner’s Electronic Liability Ledger on 04.03.2024. Considering that the assessment order was passed ex parte and that the liability had already been recovered, the Court deemed it appropriate to remit the matter to the respondent for fresh adjudication on merits.

The Court directed the petitioner to file a reply to the show cause notice along with supporting documents within 30 days from receipt of the order. The respondent was permitted to verify whether the amount had indeed been recovered from the Electronic Liability Ledger. If it was found that no recovery had been made, the petitioner was required to deposit the entire disputed tax.

Upon compliance by the petitioner, the respondent was directed to pass a fresh order in accordance with law, preferably within three months from the date of receipt of the reply. The Court further ordered that any bank account attachment would stand automatically vacated upon such compliance, provided there were no outstanding dues for other tax periods apart from the amount under the impugned order.