In a recent ruling, Madras High Court disposed of the writ petition against GST (Goods and Services Tax) order with regards to the breach of natural justice principles. The court has directed the matter for reconsideration as Rs. 90,000 were paid towards tax demand.
A writ petition was filed challenging an order dated 31st August 2023, citing a breach of the principles of natural justice. The petitioner, The Tile Bros claimed unawareness of the proceedings leading to the impugned order, asserting that neither the intimation, show cause notice, nor the impugned order were communicated through any conventional means. Instead, they were uploaded on the “View Additional Notices and Orders” tab on the GST portal.
During the proceedings, the petitioner’s counsel submitted that the show cause notice lacked specific details regarding the tax proposal. Additionally, it was noted that the petitioner had already paid a sum of Rs. 90,000/- towards the tax liability, which exceeded 10% of the disputed tax demand. The petitioner sought another opportunity to clarify the discrepancies between their GSTR 3B returns and GSTR 2A.
The Additional Government Pleader, Mr. C. Harsha Raj, representing the respondent, accepted notice but was unable to provide instructions regarding the payment made by the petitioner post-issuance of the impugned order.
Upon reviewing the impugned order, the bench of Senthilkumar Ramamoorthy observed that the tax proposal was confirmed due to the petitioner’s failure to respond to the show cause notice or attend the personal hearing. However, the petitioner provided evidence that their electronic credit ledger was debited by Rs. 90,000/-.
Given the lack of instructions from the respondent regarding this payment, the court deemed it necessary to verify whether it pertained to the tax liability under the impugned order. The High Court directed that the impugned order be treated as a show cause notice, allowing the petitioner two weeks to submit a reply.
Upon receipt of the petitioner’s response and confirmation of the Rs. 90,000/- remittance towards the tax liability, the respondent was instructed to provide a reasonable opportunity for the petitioner, including a personal hearing, and subsequently issue a fresh order within three months.
The bench also stated that in case it is found that the remittance made by the petitioner is not towards the tax demand under the order impugned herein, reconsideration by the respondent will be subject to the petitioner remitting 10% of the disputed tax demand.
The writ petition was disposed of without any order as to costs, and connected miscellaneous petitions were closed accordingly. Ms. Sri Harini S.P. appeared for the petitioner.
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