Madras HC quashes GST assessment order citing lack of personal hearing

Kandasamy Sivaprakash Vs Assistant Commissioner (ST) (Madras High Court)

In the case of Kandasamy Sivaprakash Vs Assistant Commissioner (ST), the Madras High Court addressed a writ petition seeking to quash an assessment order and related communication issued by the Assistant Commissioner. The petitioner, a retailer, had previously filed tax returns for the financial year 2018-2019. However, he received a show cause notice alleging discrepancies between various GST filings and demanding a payment of over ₹75 lakh, claiming this was due to differences in reported sales figures. The petitioner contended that the errors stemmed from a mistaken entry regarding B2C sales and requested the demand to be dropped. Despite submitting a reply, the Assistant Commissioner issued an assessment order demanding payment of nearly ₹54 lakh without a personal hearing, violating natural justice principles. The court found that the assessment order lacked due process and quashed it, allowing for a fresh consideration of the case. The court mandated the petitioner to pay 10% of the disputed tax amount to facilitate the reassessment process, emphasizing the necessity of a personal hearing before any new decision could be made. Additionally, the court ordered the lifting of the freeze on the petitioner’s bank account, which had hindered his business activities.