K.C. & Sons Vs Deputy Commissioner (ST) (Madras High Court)
Madras High Court set aside the interest and penalty order imposed on K.C. & Sons by the Deputy Commissioner (ST) under the GST Act, 2017. The petitioner challenged the order dated 07.12.2023, arguing that it violated principles of natural justice as it failed to consider the material on record. The dispute arose from a mismatch between GSTR-3B and GSTR-2A for the financial year 2017-18, leading to a demand for interest and penalty. The petitioner contended that the excess Input Tax Credit (ITC) in question had already been reversed in 2019, yet the order ignored this fact and proceeded with the levy. Additionally, part of the interest demand had already been paid, making the penalty unwarranted.
The Court found merit in the petitioner’s claims and ruled that a fresh opportunity should be given to present objections. It set aside the impugned order and directed that it be treated as a show cause notice. The petitioner was granted four weeks to submit objections, after which the respondent must reassess the matter following due process. If no response is submitted within the stipulated time, the original order would stand restored. The Court disposed of the writ petition accordingly, without imposing costs.
