Case Law Details
M. Sumitha Vs Deputy State Tax Officer-2 (Madras High Court)
In a significant decision, the Madras High Court addressed the issue of procedural fairness in GST assessment proceedings in the case of M. Sumitha Vs Deputy State Tax Officer-2. The petitioner contested an assessment order on grounds of procedural lapses following the departure of their accountant. This article provides a detailed analysis of the judgment and its implications.
The case stemmed from an assessment order dated 15.11.2023, challenged by the petitioner on the basis of inadequate opportunity to contest tax demands. The petitioner, not well-versed in GST compliance, had relied on an accountant who subsequently left their employment. This departure led to a situation where the petitioner claimed ignorance of crucial proceedings related to GST returns.
The High Court’s scrutiny revealed that the tax demand arose from a discrepancy in TDS figures between GSTR 7 filed by the deductor and the petitioner’s GSTR 3B and GSTR 1 returns. Despite notifications and show cause notices issued by authorities, the petitioner failed to respond or attend hearings, citing the accountant’s absence as the primary reason.
Acknowledging the principles of natural justice, the court found merit in the petitioner’s plea that they were unaware and ill-equipped to handle the proceedings alone after the accountant’s departure. Consequently, the court set aside the impugned order of 15.11.2023, subject to the petitioner remitting 10% of the disputed tax demand within fifteen days and submitting a detailed reply to the show cause notice.
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