The Madras High Court has directed that a previously issued GST (Goods and Services Tax) order be treated as a Show Cause Notice ( SCN ) after it was found that the order raised a liability not mentioned in the original SCN.
The petitioner, Tvl. Annai Packs challenged a GST order, arguing that it exceeds the scope of the original show cause notice. Initially, a notice in Form ASMT dated November 30, 2022, followed by an intimation on April 28, 2023, led to a show cause notice issued on August 12, 2023.
This notice called upon the petitioner to explain why a sum of Rs. 2063/- was not payable due to discrepancies between the petitioner’s GSTR-3B returns and the auto-populated GSTR-2A.
The petitioner subsequently paid this amount. Despite this, the impugned order dated December 28, 2023, imposed additional tax liability not only for the mentioned excess ITC claim but also for a discrepancy in the turnover reported in the petitioner’s annual return.
The petitioner’s counsel, Mr.T.Ramesh submitted that the show cause notice did not address the turnover discrepancy (defect no.2), making the impugned order unsustainable.
Mr. C. Harsha Raj, the Additional Government Pleader, acknowledged the petitioner’s payment for the first defect and suggested treating the order as a show cause notice for the second defect to allow the petitioner an opportunity to respond. However, this was opposed by the petitioner’s counsel, who argued for issuing a fresh show cause notice.
A single bench of Justice Senthilkumar Rammaoorthy accepted the petitioner’s contention that defect no.2 was not covered in the original show cause notice, rendering the impugned order unsustainable in that regard.
The court determined that treating the impugned order as a show cause notice for defect no.2 would not prejudice the petitioner, provided they are given the opportunity to respond comprehensively.
The writ petition was disposed of with the direction that the impugned order be treated as a show cause notice regarding defect no.2. The petitioner was permitted to submit a reply within fifteen days from the receipt of this order. All contentions are left open to the petitioner while submitting the reply.
Further, the High Court directed the respondent- State Tax Officer to provide a reasonable opportunity for the petitioner, including a personal hearing, and to issue a fresh order within three months from the date of receiving the petitioner’s reply.
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