The Madras High Court ruled that the GST ( Goods and Services Tax ) order without stating clear reasons for the rejection of the taxpayer’s reply cannot be sustained. The court stated that the order is ‘unreasoned’.
The Petitioner, Jupiter & Coa dealer under the Tamil Nadu Value Added Tax Act, 2006, had responded to a show cause notice dated December 27, 2023, with detailed replies submitted on March 13, 2024, April 3, 2024, and April 29, 2024. Despite these submissions, the impugned order was issued on April 30, 2024.
Mr. N.Murali, the petitioner’s counsel submitted that the reply had explained discrepancies between the petitioner’s returns and the GST returns of the recipient of services. Specifically, it clarified delays in payments from Government Departments during the VAT period. However, the court noted that the impugned order summarily dismissed the explanations provided by the petitioner.
The Additional Government Pleader, representing the respondent, argued that the petitioner had failed to substantiate claims of payments made during the VAT regime.
The bench of Justice Senthilkumar Ramamoorthy observed that the impugned order lacked any reasoned explanation and merely stated that the petitioner’s replies were not accepted. Therefore, the court concluded that such an unreasoned order could not be upheld.
In its Judgment, the Madras HC set aside the order dated April 30, 2024, and remanded the matter back to the respondent for reconsideration. The respondent was directed to afford the petitioner a reasonable opportunity, including a personal hearing, and issue a fresh order within three months from the date of receiving a copy of the court’s order.
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