In a recent ruling, the Madras High Court has ordered for hearing on 10% pre-deposit in a writ petition where the main dispute was the under declaration of ineligible Input Tax Credit ( ITC ) under the Goods and Services Tax ( GST ) by a registered GST dealer for the financial year 2019-20.
Sri Padma Constructions, the petitioner claimed to have filed GST returns and paid appropriate taxes for the relevant period. However, discrepancies were noted between the details furnished in GSTR-01, GSTR-2A, and GSTR-3B returns, stating under-declared ineligible ITC.
Subsequently, the GST authorities issued an intimation in Form DRC-01 on May 22, 2024, along with multiple personal hearing dates, none of which the petitioner attended.
According to the petitioner, neither the show cause notices nor the impugned order was served through Registered Post Acknowledgement Due (RPAD). Instead, they were uploaded under the “view additional notices and orders” section of the GST portal, leaving the petitioner unaware of the proceedings.
The petitioner requested a chance to explain the discrepancies and cited a similar judgment by the High Court, which remanded a matter upon payment of 10% of the disputed tax.
Justice Mohammed Shaffiq, considering the willingness of petitioner to pay the 10% disputed tax was directed to deposit the amount.
The court also directed that the impugned order would be treated as a show cause notice, allowing the petitioner to submit objections along with supporting documents.
Along with all these directions, the GST authorities were directed to consider the objections and issue a fresh order after granting a reasonable hearing.
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