The Madras High Court directed for reconsideration of the matter where a demand order was issued under Section 74 of the GST ( Goods and Services Tax) Act passed without providing opportunity for hearing. It imposed a pre-deposit of 15% of the penalty for quashing the GST order.
In the current case, the petitioner, Agam Shri Coco Products’ counsel argued that while the entire tax amount for the assessment year 2018-19 had been paid, the penalty remained outstanding.
The petitioner requested that the Court apply the same relief as in the connected matter where 15% pre-deposit of the disputed demand was mandated. The counsel also contended that the order was issued under Section 74 of the GST Act without providing an opportunity for personal hearing, which contravened the principles of natural justice.
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However, the department’s Advocate noted that in the connected case, the Ahad not paid the tax, whereas, in this case, the tax had been collected but the penalty was pending. The Government Advocate requested that the matter be remanded to the first respondent with a condition to pay 15% of the penalty.
Justice Krishnan Ramamsamy found that the petitioner had indeed been denied a chance for a personal hearing before the impugned order was issued, thus violating natural justice principles.
The High Court set aside the order dated April 18, 2023, and remanded the matter for fresh consideration under specific conditions. The petitioner was required to pay ₹18,922 (15% of the penalty) to the GST department within two weeks for quashing the impugned order. It also directed to lift the attachment of the bank account.
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