Auditor’s Failure to Notice SCN and Order on GST Portal: Madras HC grants another Opportunity to Contest Tax Demand on Merits [Read Order]

In a recent ruling, the Madras High Court set aside an order due to the petitioner's claim of not being aware of the proceedings. This lack of awareness was attributed to the failure of the auditor to notice the Show Cause Notice ( SCN ) and the order on the GST portal. The court has granted the petitioner another opportunity to contest the tax demand on merits.

The petitioner challenged the original order issued by the respondent. The order was based on alleged non-compliance with GST regulations, which resulted in a tax demand. The petitioner argued that the auditor responsible for GST compliance failed to notice the SCN and the subsequent order on the GST portal, leading to their unawareness of the proceedings.

The petitioner, represented by R. Hemalatha, sought another opportunity to contest the tax demand on merits. On instructions, she submitted that the petitioner agrees to remit 10% of the disputed tax demand as a condition for remand.

C.Harsha Rai, appearing for the respondent, submitted that principles of natural justice were complied with by issuing a notice in Form ASMT 10, a show cause notice, and a personal hearing notice.

Justice Senthilkumar Ramamoorthy, upon examining the impugned order, noted that the tax proposal was confirmed due to the petitioner's failure to file objections. However, given the petitioner's assertion that they were unaware of the proceedings, the court deemed it just to provide another opportunity to the petitioner, subject to specific conditions.

The court set aside the impugned order on the condition that the petitioner remits 10% of the disputed tax demand within 15 days from the date of receipt of the court's order. The petitioner is also permitted to submit a reply to the show cause notice within this period.

The respondent is directed to provide a reasonable opportunity to the petitioner, including a personal hearing, and subsequently issue a fresh order within three months from the date of receipt of the petitioner's reply.

To Read the full text of the Order CLICK HERE

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates