Case Law Details
Jupiter & Co. Vs Deputy State Tax Officer (Madras High Court)
In a recent judgment, the Madras High Court addressed critical issues surrounding the rejection of a taxpayer’s response in GST proceedings. The case of Jupiter & Co. versus Deputy State Tax Officer highlighted discrepancies in how tax authorities handled the petitioner’s explanations under the Tamil Nadu Value Added Tax Act, 2006.
The petitioner, Jupiter & Co., a dealer under the VAT regime, received a show cause notice regarding discrepancies in their GST returns. Despite timely responses explaining mismatches attributed to transactions with government departments, the Deputy State Tax Officer issued an order on April 30, 2024, dismissing the petitioner’s explanations without providing substantive reasons.
During proceedings, Jupiter & Co. emphasized that payments for services rendered to government departments were delayed, causing discrepancies in their GST returns. They argued that these transactions were accurately reflected in GSTR 7 filings, despite the temporal mismatch highlighted by tax authorities.
Conversely, the Additional Government Pleader contended that Jupiter & Co. failed to substantiate these claims with sufficient evidence of payments during the VAT period. However, the court found the Deputy State Tax Officer’s order lacking in reasoned analysis, merely stating the rejection of the petitioner’s replies without substantive justification.
Consequently, the Madras High Court set aside the impugned order dated April 30, 2024, and remanded the matter to the Deputy State Tax Officer for reconsideration. The court directed the respondent to afford Jupiter & Co. a reasonable opportunity, including a personal hearing, and to issue a fresh order within three months from the date of receipt of the court’s directive.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
An order dated 30.04.2024 is assailed on the ground that the order is unreasoned and disregards the petitioner’s replies.
2. The petitioner was a dealer under the Tamil Nadu Value Added Tax Act, 2006. Upon receipt of a show cause notice dated 27.12.2023, the petitioner filed replies on 13.03.2024, 03.04.2024 and 29.04.2024. The impugned order was issued thereafter on 30.04.2024.
3. Learned counsel for the petitioner referred to the reply dated 03.04.2024 and pointed out that the petitioner explained the reason for mismatch between the petitioner’s returns in comparison to the GST 7 return of the recipient of services. In particular, he submits that work was executed by the petitioner for Government Departments during the VAT period, whereas payments were made subsequently. In spite of such reply, he submits that the impugned order was issued by concluding that the petitioner’s reply is not genuine.
4. Mr. T. N. C. Kaushik, learned Additional Government Pleader, accepts notice for the respondent. He submits that the petitioner failed to produce evidence of having made payments during the VAT regime.
5. The petitioner has placed on record three replies to the show cause notice. In these replies, the petitioner has explained the reasons for mismatch by stating that Government Departments reflect transactions in GSTR 7 while deducting TDS and making payments. On examining the impugned order, it merely records that the reply is not accepted. Since the impugned order is completely unreasoned, it cannot be sustained.
6. For reasons set out above, the impugned order dated 30.04.2024 is set aside and the matter is remanded to the respondent for reconsideration. The respondent is also directed to provide a reasonable opportunity to the petitioner, including a personal hearing, and thereafter issue a fresh order, within three months from the date of receipt of a copy of this order.
7. W. P.No.14964 of 2024 is disposed of on the above terms without any order as to costs. Consequently, the connected miscellaneous petitions are also closed.
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