In a recent judgment, the Madras High Court addressed the case of P. Athimoolam Contractor vs. State Tax Officer. The court’s decision revolved around the recovery of taxes from the petitioner’s bank account and the subsequent refund or adjustment of these amounts based on the petitioner’s compliance with tax liabilities and filings.
The petitioner, P. Athimoolam Contractor, had faced a situation where taxes for September 2019 and October 2019 were paid belatedly, accompanied by return filings in March on 11th, 2020, in Form GSTR-3B, as per Rule 61(5) of the GST Act. Subsequently, an additional sum of Rs. 4,13,222/- was recovered for the same tax liability. This recovery was initiated based on an order dated 6th December 2022, which followed the issuance of GST ASMT-10 notices on 18th August 2020 and 26th December 2020, as well as DRC-01 notices sent to the petitioner on 21st February 2022. Unfortunately, the petitioner failed to respond to these notices, leading to the issuance of the recovery order.
However, the Madras High Court took into account various factors, including the petitioner’s payment of the tax liability and filing of returns in GSTR-3B for March 2020 on 11th November 2020. The court acknowledged that while the petitioner was initially at fault for non-compliance with notices, they had subsequently settled their tax dues through the mentioned filings.
As a result, the Madras High Court decided to set aside the impugned order and remit the case back to the respondents (tax authorities) for a fresh determination. The court instructed the authorities to pass a new order based on merits and in accordance with the law, within a period of thirty (30) days from the date of receiving the court’s order.
Furthermore, the court addressed the recovery made directly from the petitioner’s bank account on 5th May 2023. It ordered that this amount should be refunded to the petitioner, or alternatively, adjusted depending on the final outcome of the proceedings. The petitioner was also given the opportunity to file a fresh representation with the tax authorities within one week from the date of receiving the court’s order.
In the case of P. Athimoolam Contractor vs. State Tax Officer, the Madras High Court displayed a balance between holding the petitioner accountable for initial non-compliance with notices and recognizing their subsequent efforts to clear tax liabilities. The court’s decision to set aside the recovery order, remit the case for fresh determination, and order a refund or adjustment of the recovered amount highlights the importance of procedural fairness and compliance with tax regulations.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
Mrs. E.Ranganayaki, learned Special Government Pleader takes notice on behalf of the respondents.
2. Prima Facie, the petitioner has been subject to the gross injustice. The tax due for the month of September 2019 and October 2019 was belatedly paid by the petitioner along with the returns filed during the month of March on 11.11.2020 in Form GSTR -3B under Rule 61(5) of the GST Act. A further sum of Rs.4,13,222/- has also been recovered for the same amount, pursuant to the impugned order dated 06.12.2022. The said order has been passed after GST ASMT – 10 dated 18.08.2020 and 26.12.2020 were issued and after notice in DRC – 01 were issued to the petitioner on 21.02.2022. However, the petitioner failed to respond and thus the aforesaid order came to be passed on 06.12.2022. Thus, petitioner was at fault.
3. However, considering overall facts and circumstances and considering the fact that the petitioner appears to have discharged the tax liability by paying the amount and filing the return in GSTR – 3B for the period March 2020 on 11.11.2020. Court is inclined to set aside the impugned order and remit the case back to the respondents to pass a fresh order on merits and in accordance with law, within a period of thirty (30) days from the date of receipt of a copy of this order.
4. The amount recovered directly from the petitioner’s bank account on 05.05.2023 shall be refunded to the petitioner or adjusted subject to the final out come of the proceedings. Meanwhile, the petitioner may file a fresh representation with the respondents, within a period of one week from the date of receipt of a copy of this order.
5. This writ petition is disposed of. No costs. Consequently, connected writ miscellaneous petitions are closed.