Case Law Details
A.B. Impex Vs Deputy State Tax Officer (Madras High Court)
In the case of A.B. Impex vs. Deputy State Tax Officer, the Madras High Court reviewed a petition challenging an order dated December 23, 2023, which confirmed a tax demand due to discrepancies between the petitioner’s GSTR 3B returns and the auto-populated GSTR 2A. The petitioner argued that they were unable to contest the demand due to severe illness and the impact of the COVID-19 pandemic. The Court found that while notices were issued and principles of natural justice were initially followed, the petitioner had not been given a fair opportunity to address the discrepancies. Consequently, the Court set aside the original order, provided the petitioner remits 10% of the disputed tax within fifteen days, and allowed them to submit a response to the show cause notice. The respondent is then directed to offer a personal hearing and issue a fresh order within three months of receiving the petitioner’s reply. The Court also ordered the lifting of the bank attachment previously imposed.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
An order in original dated 23.12.2023 is challenged in this writ petition on the ground that a reasonable opportunity was not provided to the petitioner to contest the tax demand on merits. The petitioner asserts that his business suffered heavy losses on account of the Covid-19 pandemic. It is further stated that the petitioner was seriously unwell during the relevant assessment period and, consequently, unable to follow up with the accountant. In those circumstances, it is stated that the petitioner could not participate in proceedings.
2. Learned counsel for the petitioner submits that the confirmed tax proposal relates to a mismatch between the petitioner’s GSTR 3B returns and the auto populated GSTR 2A. She also submits that there should be no mismatch if the correct data is taken from the auto populated GSTR 2A. On instructions, she submits that the petitioner agrees to remit 10% of the disputed tax demand as a condition for remand.
3. Mr. C. Harsha Raj, learned Additional Government Pleader, accepts notice for the respondent. He submits that an ASMT 10 notice was issued on 12.05.2023 upon scrutiny of the petitioner’s return. Thereafter, show cause notice dated 19.07.2023 and personal hearing notices dated 15.12.2023, 06.11.2023 and 14.03.2023 were issued. Therefore, he submits that principles of natural justice were complied with.
4. On examining the impugned order, it is evident that the tax proposal was confirmed on account of the tax payer failing to reply to the show cause notice. By taking into account the assertions in the affidavit with regard to the reasons for non participation by the petitioner and the discharge summary dated 30.05.2022 from VS Hospital, the interest of justice warrants re-consideration by putting the petitioner on terms.
5. Therefore, impugned order dated 23.12.2023 is set aside on condition that the petitioner remits 10% of the disputed tax demand, as agreed to, within fifteen days from the date of receipt of a copy of this order. Within the said period, the petitioner is permitted to submit a reply to the show cause notice. Upon receipt of the petitioner’s reply and on 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 the petitioner’s reply. In view of the assessment order being set aside, the bank attachment is raised.
6. W.P.No.18939 of 2024 is disposed of on the above terms. No costs. Consequently, W.M.P.Nos.20797 and 20798 of 2024 are closed.
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