Case Law Details
Rishab Industries Vs Assistant Commissioner (ST) (Madras High Court)
The case of Rishab Industries vs. The Assistant Commissioner (ST) involved a challenge against an order dated 15.09.2023, primarily on the grounds that the petitioner was not provided with a reasonable opportunity to contest the tax demand on its merits.
Rishab Industries, engaged in wholesale and retail trading of plastic scraps and allied items, claimed that their GST compliance consultant failed to keep them informed about the proceedings leading up to the challenged order.
During the proceedings, the petitioner’s counsel highlighted that there was only a minor discrepancy of Rs. 19,341 between the petitioner’s GSTR 3B and the auto-populated GSTR 2A. They asserted that if given an opportunity, they could effectively explain and contest the tax demand. The petitioner also expressed willingness to remit 10% of the disputed tax demand.
The learned Government Advocate representing the respondent pointed out that the impugned order followed an intimation dated 19.05.2022, a show cause notice dated 08.06.2023, and a personal hearing notice dated 28.06.2023.
Upon examining the impugned order, it was found that Input Tax Credit (ITC) availed by the petitioner was reversed due to the disparity between their GSTR 3B returns and the auto-populated GSTR 2A. However, considering the minor nature of the discrepancy and to ensure fairness, the court deemed it just and necessary to grant the petitioner an opportunity to contest the tax demand on its merits.
Consequently, the impugned order dated 15.09.2023 was set aside, and the matter was remanded for reconsideration. The petitioner was directed to remit 10% of the disputed tax demand within two weeks and submit a reply to the show cause notice within the same period. Upon receipt of the petitioner’s reply and confirmation of the remittance, the respondent was instructed to provide a reasonable opportunity to the petitioner, including a personal hearing, and issue a fresh order within three months.
As a result of setting aside the assessment order, the consequential bank attachment was lifted. The writ petition was disposed of without any order as to costs, and connected miscellaneous petitions were closed accordingly.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
An order dated 15.09.2023 is challenged on the ground that the petitioner did not have a reasonable opportunity to contest the tax demand on merits.
2. The petitioner is engaged in the business of wholesale and retail trading of plastic scraps and allied items. The petitioner asserts that the consultant engaged for GST compliances did not keep the petitioner informed about proceedings culminating in the order impugned herein.
3. Learned counsel for the petitioner referred to the annual return of the petitioner and pointed out that the discrepancy between the petitioner’s GSTR 3B and the auto-populated GSTR 2A is only Rs.19,341/-. If provided an opportunity, he submits that the petitioner would be in a position to explain the discrepancy and contest the tax demand effectively. On instructions, he submits that the petitioner is willing to remit 10% of the disputed tax demand as a condition for Mrs.K.Vasanthamala, learned Government Advocate, accepts notice for the 1st respondent. She points out that the impugned order was preceded by an intimation dated 19.05.2022, a show cause notice dated 08.06.2023 and a personal hearing notice dated 28.06.2023.
5. On perusal of the impugned order, it is clear that Input Tax Credit (ITC) availed of by the petitioner was reversed on account of the disparity between the petitioner’s GSTR 3B returns and the auto-populated GSTR 2A. The petitioner has placed on record the annual return and learned counsel contended on such basis that the discrepancy is only to an extent of Rs.19,341/-. In these circumstances, albeit by putting the petitioner on terms, it is just and necessary to provide an opportunity to the petitioner to contest the tax demand on merits.
6. Solely for reasons set out above, the impugned order dated 15.09.2023 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 period of two weeks from the date of receipt of a copy of this order. The petitioner is also permitted to submit a reply to the show cause notice within the aforesaid period. Upon receipt of the petitioner’s reply and upon being satisfied that 10% of the disputed tax demand was received, the 1st 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 the petitioner’s reply. In view of the assessment order being set aside, the consequential bank attachment is raised.
7. The writ petition is disposed of on the above terms without any order as to costs. Consequently, connected miscellaneous petitions are closed.
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