Petitioner as a registered person Must Continuously Monitor GST Portal: Madras HC

K. A. & Co. Vs State Tax Officer (Madras High Court)

The Madras High Court recently rendered a significant judgment in the case of K. A. & Co. vs State Tax Officer. The court scrutinized an order dated 29.12.2023, citing violations of natural justice and inadequate consideration. The petitioner challenged the order primarily on the grounds of non-receipt of the show cause notice (SCN), which was solely uploaded on the GST portal.

Upon inspection of the petitioner’s registered place of business in March 2023, proceedings commenced, leading to the issuance of an intimation and subsequently a show cause notice on 28.09.2023. However, crucially, the petitioner did not respond to the notice as it was solely uploaded on the GST portal’s “View Additional Notices and Orders” tab. The petitioner argued that this mode of communication was insufficient and failed to fulfill the principles of natural justice.

HC observed that The justification of the petitioner for not responding to the show cause notice is not convincing in as much as the petitioner is under an obligation to monitor the GST portal on an ongoing basis as a registered person.

Furthermore, the petitioner contended that the tax liability was inaccurately imposed based on the balance sheet for the financial year 2018-2019 instead of 2017-2018. The discrepancy resulted in an inflated taxable turnover, highlighting a clear error and lack of proper assessment by the tax authorities. Despite the availability of financial statements during the inspection, the respondent overlooked crucial evidence, indicating a failure to apply due diligence.

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