Case Law Details
Muthu Traders Vs Deputy Commercial Tax Officer (Madras High Court)
The case of Muthu Traders vs. Deputy Commercial Tax Officer before the Madras High Court involves a challenge to an order dated 10.07.2023, alleging that the petitioner was not given a fair opportunity to contest a tax demand related to GST discrepancies.
The petitioner, engaged in trading groceries and allied products, claims ignorance of GST compliances and asserts that a consultant was engaged for such matters. However, due to the consultant’s failure to inform the petitioner about the proceedings leading to the impugned order, the petitioner was unaware of the developments.
The confirmed tax demand arises from a mismatch between the petitioner’s GSTR 3B returns and the auto-populated GSTR 2A. The petitioner seeks an opportunity to explain the discrepancy and is willing to remit 10% of the disputed tax demand as a condition for remand.
The learned Additional Government Pleader for respondents 1 & 2 acknowledges the notice and points out that the impugned order followed due process, including intimation, show cause notice, and a personal hearing notice.
Upon reviewing the impugned order, the court observes that the tax liability stems from the discrepancy between the petitioner’s GSTR 3B returns and the auto-populated GSTR 2A. However, the tax demand was confirmed because the petitioner failed to respond or appear for the personal hearing. Considering the circumstances, the court deems it just and necessary to provide the petitioner with an opportunity to contest the tax demand on merits.
Accordingly, the impugned order dated 10.07.2023 is set aside, and the matter is remanded for reconsideration. The petitioner is required to remit 10% of the disputed tax demand within two weeks from receiving a copy of the court’s order and submit a reply to the show cause notice within the same period. Upon receipt of the petitioner’s reply and confirmation of the pre-deposit, respondents 1 & 2 are directed to provide a reasonable opportunity to the petitioner, including a personal hearing, and issue a fresh order within three months.
In conclusion, the Madras High Court mandates a 10% pre-deposit by the petitioner for remand in the GST discrepancy case. The court emphasizes the importance of due process and provides the petitioner with an opportunity to contest the tax demand on merits.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
An order dated 10.07.2023 is challenged in this writ petition on the ground that the petitioner was not provided a reasonable opportunity to contest the tax demand on merits.
2. The petitioner states that he is engaged in the business of trading in groceries and allied products. The petitioner asserts that he is not conversant with GST compliances and had engaged a consultant for such Since the consultant did not inform the petitioner about proceedings culminating in the impugned order, it is stated that the petitioner was unaware of such proceedings.
3. Learned counsel for the petitioner submits that the confirmed tax demand pertains to mismatch between the GSTR 3B returns of the petitioner and the auto-populated GSTR 2A. If provided an opportunity, he submits that the petitioner would be able to explain the discrepancy. On instructions, he submits that the petitioner is willing 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 respondents 1 & 2. He points out that the impugned order was preceded by an intimation, show cause notice and a personal hearing notice.
5. On perusal of the impugned order, it is evident that the tax liability pertains to the mismatch between the GSTR 3B returns of the petitioner and the auto-populated GSTR 2A. It is also evident that the tax demand was confirmed because the petitioner failed to reply or appear for the personal hearing. 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 such reason, the impugned order dated 10.07.2023 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 respondents 1 & 2 are 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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