Case Law Details
Sugos Steel Traders Vs Assistant Commissioner (ST)(FAC) (Madras High Court)
Conclusion: Assessee should deposit 25% of the disputed tax within a period of four (4) weeks for a fresh hearing in matters engaging the discrepancies between GSTR-3B and GSTR-2A returns.
Held: Assessee was a registered dealer in iron, steel, and M.S. scraps under the CGST/TNGST Act, 2017, encountered scrutiny regarding the mismatches in returns. Even after filing returns and paying taxes, discrepancies occurred in scrutiny, prompting the issuance of a show cause notice (Form GST DRC-01) on February 7, 2024, through the GST portal. Subsequent to three reminder notices were being furnished however assessee neither furnished a response nor filed the tax amount, directing to the issuance of the impugned assessment order. The impugned order was challenged on the premise that the notices and orders were uploaded under the “view additional notices and orders” tab on the GST Portal, thereby, assessee was unaware of the initiated proceedings thus unable to participate in the adjudication proceedings. The limited issue that arose for consideration in the impugned order was whether the suppliers were allegedly fictitious/non existing entity. It was submitted by assessee that if assessee was provided with an opportunity, he would be able to explain the allegation in the impugned order. It was held that assessee should deposit 25% of the disputed tax within a period of four (4) weeks from the date of receipt of a copy of this order. On complying with the above condition, the impugned order of assessment should be treated as show cause notice and assessee should 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 were filed, the same should be considered by the respondent and orders should be passed in accordance with law after affording a reasonable opportunity of hearing to assessee. If the above deposit was not paid or objections are not filed within the stipulated period, i.e., four weeks respectively from the date of receipt of a copy of this order, the impugned order of assessment should stand restored.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
The present Writ Petition is filed challenging the impugned order passed by the respondent dated 14.04.2024 relating to the assessment year 2017-18.
2. The petitioner is engaged in supply of iron, steel and M.S. Scraps. The petitioner is a registered dealer under the Tamil Nadu Goods and Services Act, During the relevant period, the petitioner filed its return and paid appropriate taxes. While scrutinizing the petitioner’s return, it was found that the suppliers were allegedly fictitious/non existing entity.
2.1. Subsequently, a notice was issued in DRC-01A to the petitioner on 22.10.2022 through GST Portal, followed by a Show Cause Notices on 09.01.2023, 19.02.2024 and 01.04.2024. However, the petitioner had neither filed its reply nor paid the tax amount. Hence, the impugned order came to be passed, whereby input tax credit has been instructed to be blocked.
3. The impugned order is challenged on the premise that the notices and orders were uploaded under the “view additional notices and orders” tab on the GST Portal, thereby, the petitioner was unaware of the initiated proceedings thus unable to participate in the adjudication proceedings.
4. The limited issue that arises for consideration in the impugned order is whether the suppliers were allegedly fictitious/non existing entity. It is submitted by the learned counsel for the petitioner that if the petitioner is provided with an opportunity, he would be able to explain the allegation in the impugned order.
5. 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 O/o. the Assistant Commissioner of GST & Central Excise in W.P.(MD)No.11924 of 2024 dated 10.06.2024. It was further submitted that the petitioner is ready and willing to pay 25% of the disputed tax and that he may be granted one final opportunity before the adjudicating authority to put forth their objections to the proposal, to which the learned Government Advocate appearing for the respondent does not have any serious objection.
6. In view thereof, the impugned order dated 14.05.2024 is set aside and the petitioner shall deposit 25% of the disputed tax within a period of four (4) weeks from the date of receipt of a copy of this order. 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. If the above deposit is not paid or objections are not filed within the stipulated period, i.e., four weeks respectively from the date of receipt of a copy of this order, the impugned order of assessment shall stand restored.
7. Accordingly, the Writ Petition stands disposed of. No costs. Consequently, W.M.P.Nos.37356 and 37358 of 2024 are closed.
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