Case Law Details
Tvl. Jainsons Castors and Industrial Products Vs Assistant Commissioner (ST) (Madras High Court)
The Madras High Court recently set aside a GST assessment order against Tvl. Jainsons Castors and Industrial Products for the assessment year 2017-18. The petitioner, a supplier of trailers, semi-trailers, and other vehicles registered under the GST Act, 2017, had filed returns and paid taxes for the relevant period. However, discrepancies were found between the petitioner’s GSTR 3B and GSTR 2A returns during scrutiny.
Consequently, a notice in DRC-01 was issued, followed by reminders and offers for personal hearings. Despite these opportunities, the petitioner neither filed a reply nor attended any hearings. The petitioner’s counsel argued that they were unaware of the proceedings as the show cause notices and the assessment order were uploaded to the GST portal but not served directly via tender or Registered Post with Acknowledgement Due (RPAD). This lack of proper service, the petitioner contended, prevented them from participating in the adjudication process.
Relying on a recent judgment in M/s. K.Balakrishnan, Balu Cables vs. O/o. the Assistant Commissioner of GST & Central Excise, the petitioner’s counsel submitted that similar cases had been remanded back for reconsideration upon payment of 25% of the disputed tax. The petitioner expressed willingness to pay this amount and requested a final opportunity to present their objections to the proposed assessment. The petitioner also requested that the 10% pre-deposit made during a subsequent appeal be adjusted towards the 25% payment. The respondent’s counsel did not object to this request.
The High Court, with the consent of both parties, disposed of the writ petition with specific conditions. The impugned assessment order was set aside. The petitioner was directed to deposit 25% of the disputed taxes within four weeks of receiving a copy of the order. Any amounts already recovered or paid, including the appeal pre-deposit, will be adjusted towards this 25% payment. The assessing authority was directed to inform the petitioner of any remaining balance due within one week of receiving the court order, with the petitioner then having three weeks to pay the balance. Failure to comply with the 25% payment within the four-week deadline would result in the reinstatement of the original assessment order. Any bank account attachments or garnishee proceedings would be lifted upon compliance with the payment condition.
Upon fulfilling the 25% payment condition, the set-aside assessment order would be treated as a show cause notice. The petitioner would then have four weeks to submit their objections along with supporting documents. The respondent was directed to consider these objections and pass a fresh order in accordance with the law, after granting the petitioner a reasonable opportunity for a hearing. Failure to either comply with the 25% payment or file objections within the stipulated four-week periods would result in the automatic restoration of the original assessment order. No order was made as to costs.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
The present writ petition is filed challenging the impugned order dated 21.12.2023 for the assessment year 2017-18.
2. It is submitted by the learned counsel for the petitioner that the petitioner is engaged in supply of trailers, semi-trailers and others vehicles and is registered under the Goods and Services Tax Act, 2017. During the relevant period 2017-18, the petitioner filed its returns and paid the appropriate taxes. However, during the scrutiny of the petitioner’s monthly return, it was found that there was mismatch between GSTR 3B and GSTR 2A.
3. It is submitted by the learned counsel for the petitioner that a notice in DRC-01 was issued on 30.09.2023, followed by reminders on 21.11.2023 and 30.11.2023. Further, personal hearing was offered on 06.10.2023, 27.11.2023 and 06.12.2023. 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 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. It is further submitted that subsequent to the passing of the impugned order, an appeal was also preferred and payment of 10% of disputed tax was made as pre- deposit and his only request is that the same may be adjusted towards the only request is that the same may be adjusted towards 25% of the disputed tax, 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 12.2023 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 Consequently, connected miscellaneous petitions are closed.
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