The Madras High Court has quashed the GST demand order, ruling that the liability was discharged through the reversal of Input Tax Credit (ITC).
In this case, the matter relates to the period 2017-18. The petitioner is M/s.New Tea Exports Private Limited.
The counsel on behalf of the petitioner contended that after the impugned order was passed the entire tax amount was paid by the petitioner.
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It was submitted by the counsel on behalf of the petitioner that they did not receive notice for a personal hearing, as the show cause notice was only uploaded on the GST portal under the “Additional Notices” tab, which they were unaware of. Due to which the petitioner was unable to file a reply and to the impugned ex parte order dated 19.07.2021 being passed without a hearing.
The counsel on behalf of the respondent submitted that after the ex-parte order was passed, the petitioner had remitted the entire tax amount, and the issue involved in the present petition pertains to the imposition of penalty and interest.
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It was contended by the respondent’s counsel that although a decision to extend the deadline for tax payment until March 31, 2025, was made recently at the 53rd GST Annual Council meeting, it has not yet been announced in the form of Section 128(A) of the Central Goods and Services Tax Act. She thus concluded that, in light of all mentioned above, it would be fair to give the petitioner one more chance to reply and present the matter to the respondent.
In the later stage of proceedings, the counsel on behalf of the petitioner submitted that the petitioner is not liable to pay any amount as the entire tax liability has been paid by the petitioner by reversal of wrongly availed ITC.
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The bench observed that the petitioner is not required to pay anything by applying the proposed amendment to Section 128(A) of the CGST Act because there is sufficient amount in the ITC.
The High Court, comprising Justice Krishnan Ramaswamy, set aside the impugned order and remanded the matter back to the respondent for fresh consideration.
The petitioner was represented by Ms. Aparna Nandakumar and the respondent by Ms. Amirtha Poonkodi Dinakaran.
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