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Case Law Details

Case Name : Bajrang & Bajrang Vs State Tax Officer (FAC) (Madras High Court)
Appeal Number : W.P. No. 9960 of 2024
Date of Judgement/Order : 16/04/2024
Related Assessment Year :

Bajrang & Bajrang Vs State Tax Officer (FAC) (Madras High Court)

The Madras High Court recently rendered a significant judgment in the case of Bajrang & Bajrang Vs State Tax Officer (FAC). The case revolves around the responsibility of registered individuals to monitor the GST portal and respond to tax demands promptly.

The petitioner challenged an order dated 29.12.2023, alleging a lack of opportunity to contest the tax demand. The petitioner, citing age and health issues, claimed inability to respond to notices or participate in proceedings.

However, the court noted that an audit was conducted, and the petitioner was duly informed through intimation and a show cause notice. Despite this, the petitioner failed to respond with supporting documents, leading to the confirmation of the tax proposal.

While recognizing the petitioner’s circumstances, the court emphasized the registered person’s responsibility to monitor the GST portal. Nonetheless, in the interest of justice, the court remanded the matter, allowing the petitioner to remit 10% of the disputed tax demand and submit a reply within three weeks.

The court directed the respondent to reconsider the matter upon receipt of the petitioner’s reply, providing a reasonable opportunity, including a personal hearing, and issuing a fresh order within two months.

The Madras High Court’s ruling underscores the importance of registered persons actively monitoring the GST portal and responding to tax demands promptly. While acknowledging individual challenges, the court upholds the principle of accountability in tax compliance. This judgment serves as a reminder for taxpayers to stay vigilant and engage proactively with tax authorities to avoid adverse consequences.

FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT

The petitioner assails an order dated 29.12.2023 on the ground that a reasonable opportunity was not provided to contest the tax demand on merits.

2. The petitioner asserts that he is about 78 years old and was suffering from various illnesses. Consequently, it is stated that he was unable to respond to the show cause notice or participate in proceedings culminating in the order impugned herein.

3. Learned counsel for the petitioner submits that the petitioner would be in a position to respond to each of the five defects dealt with in the impugned order if provided an opportunity. He further submits that the petitioner is willing to remit 10% of the disputed tax demand as a condition for remand.

4. Mr. V.Prashanth Kiran, learned Government Advocate, accepts notice for the respondent. By referring to the impugned order, he points out that an audit of the petitioner’s books of account was conducted and that the intimation and show cause notice was subsequent to the issuance of the audit report to the petitioner. In these circumstances, he contends that sufficient opportunity was provided to the petitioner.

5. On perusal of the impugned order, it is evident that an audit was conducted and that an audit report dated 15.09.2023 was issued. It is also clear that an intimation and show cause notice preceded the impugned order. In these circumstances, the petitioner cannot be absolved of responsibility as a registered person to monitor the GST portal. At the same time, it is noticeable that the tax proposal was confirmed because the petitioner did not submit a reply along with supporting documents. Therefore, albeit by putting the petitioner on terms, the interest of justice demands that the petitioner be provided an opportunity.

6. Therefore, the impugned order dated 29.12.2023 is set aside and the matter is remanded for reconsideration subject to the condition that the petitioner remits 10% of the disputed tax demand as agreed to within a maximum period of three weeks from the date of receipt of a copy of this order. Within the aforesaid period, the petitioner is also 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 a period of two months from the date of receipt of the petitioner’s reply.

7. The writ petition is disposed of on the above terms. There will be no order as to costs. Consequently, connected miscellaneous petitions are closed.

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