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Case Law Details

Case Name : Neelan Pharmacy and General Vs Deputy State Tax Officer (Madras High Court)
Appeal Number : Writ Petition No.14994 of 2024
Date of Judgement/Order : 18/06/2024
Related Assessment Year :
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Neelan Pharmacy and General Vs Deputy State Tax Officer (Madras High Court)

In a significant ruling, the Madras High Court addressed the grievance of Neelan Pharmacy and General regarding a GST demand based on discrepancies between GSTR 2A and GSTR 4 returns. The court set aside the original GST order, emphasizing the necessity of providing a fair opportunity to the taxpayer to present their case, especially when external circumstances prevent participation in hearings.

Neelan Pharmacy and General, a partnership firm engaged in retail trading of medical, surgical, and pharmaceutical products, was under scrutiny for discrepancies in their tax returns. The issue arose when the firm’s GSTR 2A return, which reflects the inward supplies, did not align with the turnover reported in their GSTR 4/CMP-08 return.

The dispute began with a show cause notice dated 17th October 2023, calling for an explanation of the disparity. Despite submitting replies in February 2024, the petitioner was unable to participate in the personal hearing due to the closure of their shop caused by metro rail construction in the vicinity. This inability to attend the hearing led to the rejection of their reply as they did not provide the necessary profit and loss account and stock details.

The petitioner’s counsel argued that the disparity was due to the non-consideration of closing and opening stock and stressed the genuine reasons for missing the personal hearing. A proposal to remit 10% of the disputed tax demand was made as a condition for remand.

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