Trident Home Furnishings Private Limited Vs Assistant Commissioner (ST) (Madras High Court)
The Madras High Court recently quashed an assessment order and subsequent bank attachment concerning Trident Home Furnishings Private Limited in its dispute with the Assistant Commissioner (ST). The case revolved around discrepancies in the petitioner’s tax returns and raised important questions about adequate communication of show cause notices (SCNs) via the Goods and Services Tax (GST) portal.
Background of the Case
The petitioner, Trident Home Furnishings Private Limited, faced an assessment order concerning alleged discrepancies in their GST returns for the financial year 2018-2019. A show cause notice (SCN) was issued on 22 September 2023, outlining concerns over differences between the petitioner’s GSTR-3B returns (summary of outward supply) and auto-populated GSTR-2A data (details of inward supplies).
The petitioner argued that they were unaware of the SCN and assessment proceedings until their bank account was attached, as the SCN and the impugned order were uploaded only to the “View Additional Notices & Orders” tab of the GST portal. The petitioner contended that they did not receive direct communication or notification, which prevented them from responding in a timely manner to the allegations of tax discrepancies.
In response to this, the petitioner filed writ petitions challenging the assessment order and the resulting bank attachment.
Petitioner’s Arguments
The petitioner’s counsel highlighted several critical points during the court proceedings:
1. Discrepancies in GST Returns: The Assistant Commissioner (ST) had observed differences between the inward supply values as per GSTR-2A and the outward supply figures reported in GSTR-3B. This difference formed the basis for the tax liability imposed on the petitioner, with the authorities speculating that the petitioner had engaged in sales suppression.
2. Speculative Tax Liability: The petitioner contended that the tax liability imposed by the respondent was speculative, based solely on a comparison of purchase values and sales without proper verification of the actual outward supplies. They argued that the burden of proving sales suppression lies with the tax authorities and not with the taxpayer.
3. Lack of Communication: A key issue raised by the petitioner was that they were not directly notified of the SCN or subsequent assessment order. Instead, these documents were uploaded to the GST portal under the “View Additional Notices & Orders” section, which the petitioner argued was insufficient communication under GST rules.
4. Offer to Pay Partial Amount: As a gesture of goodwill and to expedite the resolution of the matter, the petitioner expressed willingness to pay 5% of the disputed tax amount while the case was reconsidered.
