Case Law Details
Jai Maa Engineering Co. Vs State Tax Officer (Madras High Court)
In Jai Maa Engineering Co. vs. State Tax Officer, the Madras High Court addressed a challenge to a GST order dated August 25, 2023, which had confirmed a tax demand due to the petitioner’s lack of response. The petitioner argued that they were unaware of the proceedings because communications were only posted on the GST portal, and they only became aware when their bank account was attached in February 2024. The petitioner claimed there was no actual mismatch between their GSTR-3B returns and the auto-populated GSTR-2A and agreed to remit 10% of the disputed tax amount as a condition for reconsideration. The Court found that the petitioner had not been given a proper opportunity to contest the demand, thus directing that the impugned order be set aside. The matter was remanded for reconsideration, with the petitioner required to submit a reply to the show cause notice and make the payment within 15 days. The Court also ordered the lifting of the bank attachment and instructed that a fresh order be issued within three months after receiving the petitioner’s reply.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
An order in original dated 25.08.2023 is assailed on the ground that the petitioner did not have a reasonable opportunity to contest the tax demand on merits.
2. The petitioner asserts that he was unaware of proceedings culminating in the impugned order because all communications were uploaded on the GST portal and not communicated to the petitioner through any other mode. It is further stated that he become aware of proceedings only at the end of February 2024 when the petitioner’s bank account was attached.
3. Learned counsel for the petitioner submits that the tax proposal pertains to a mismatch between the GSTR-3B returns and the auto- populated GSTR-2A. If provided an opportunity, he submits that the petitioner would be in a position to establish that there was no difference between the petitioner’s returns and GSTR-2A. After submitting that the date of personal hearing was not fixed, learned counsel submits that the petitioner agrees to remit 10% of the disputed tax demand as a condition for remand.
4. Mr. T. N. C. Kaushik, learned Additional Government Pleader, accepts notice for the respondent. He submits that ASMT-10 notice was issued upon scrutiny of the petitioner’s returns. Thereafter, the show cause notice dated 06.02.2023 was issued and a personal hearing was also offered to the petitioner.
5. On perusal of the impugned order, it is evident that the tax proposal was confirmed because the taxpayer failed to reply or submit oral or documentary evidence. By taking into account the assertion that the petitioner become aware of proceedings only upon the attachment of his bank account, the interest of justice warrants reconsideration subject to the petitioner being put on terms.
6. For the aforesaid reasons, the impugned order dated 25.08.2023 is set aside and the matter is remanded for reconsideration on condition that the petitioner remits 10% of the disputed tax demand within 15 days from the date of receipt of a copy of this order. Within the aforesaid period, the petitioner is permitted to submit a reply to the show cause notice. Upon receipt of the petitioner’s reply and upon being satisfied that 10% of the disputed tax demand was received, the respondent is directed to provide a reasonable opportunity to the petitioner, including a personal hearing, and thereafter issue a fresh order within three months from the date of receipt of reply from the petitioner. In view of the impugned order being set aside, the bank attachment is raised.
7. The Writ Petition is disposed of on the above terms. There shall be no order as to costs. Consequently, the connected miscellaneous petitions are also closed.
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