The Madras High Court set aside the order of Rs. 25,000 GST ( Goods and Services Tax ) demand met with Rs. 1.36 crore penalty for generating E-way bill indicating ‘Nil’ Value. The matter was remanded for reconsideration to the concerned GST authorities.
Counsel for the assessee-petitioner, Hajee S. M. Ahamed and Company, argued that while the total tax demand under the impugned order was only Rs. 25,000, a disproportionate penalty of Rs. 1.36 crore was imposed for the alleged non-generation of E-way bills.
The counsel submitted that E-way bills totaling Rs. 6,81,55,597 were generated and a sum of Rs. 1,55,300 had been debited from the petitioner’s bank account, covering the total tax demand and a portion of the penalty. Given these facts, the counsel sought another opportunity for reconsideration.
The assessee challenged the GST order through a writ petition, claiming unawareness of the proceedings leading to the impugned order due to the show cause notice and other communications being uploaded only on the GST portal without any direct communication. The assessee became aware of the order only upon receiving a recovery letter on May 27, 2024.
The respondents argued that principles of natural justice were followed, having issued intimation, show cause notice, and two reminders.
The court examined the GST order. It was noted that the penalty was based on the assessee generating E-way bills indicating nil value. Justice Senthilkumar Ramamoorthy observed that the assessee had provided records of E-way bills, showing an aggregate value of Rs. 6,81,55,597 during the relevant period, justifying a remand for reconsideration. Consequently, the order was set aside. The GST officers were directed to provide a reasonable opportunity for the petitioner, including a personal hearing, and issue a fresh order within three months of receiving the petitioner’s reply. The bank attachment has been lifted in light of the GST assessment order being set aside
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