In a recent ruling, a Single Bench of Madras High Court allowed an extension of 30 days to Exide Industries to file the explanation on pending queries which was denied by the Goods and Services Tax authorities.
The bench of Justice P.B. Balaji observed that the impugned orders do not discuss the reasons for extension of time at all, leave alone giving its finding either granting or refusing the adjournment and thus set aside all the orders.
The petitioner, Exide Industries Limited, is engaged in the business of manufacture of lead acid storage batteries; the petitioner is registered under the Goods and Services Tax Act.
The Goods and Services Tax (GST) Authorities issued a Show Cause Notice (SCN) under Section 73 of the Central Goods and Services Tax Act, 2017, citing various grounds for levy of penalty and interest.
The petitioner submitted its reply on 13.01.2023 and on the same day, concededly, the petitioner was afforded a personal hearing; subsequently, since further details were sought, on 23.01.2023.
Further, the petitioner gave details with regard to three of the six queries raised and sought time as regards the remaining three queries, however, the respondent proceeded to pass the impugned orders dated 10.02.2023.
The bench noted that the petitioner’s request for a time extension in relation to three of the queries was ignored by the respondent-authorities.
The counsel for the petitioner has put to the attention of the court Circular No. 12/2022, dated September 26, 2022, issued by the respondent, in which it was stated that a person should be given a reasonable opportunity to show cause and that, depending on the specifics of each case, an even longer extension of time may be granted by the Assessing/Adjudicating Officer.
The bench highlighted the circular dated 26.09.2022 of the respondent also clearly stipulates that the communication granting time or refusal to grant time, shall also be sent to the assessee.
The respondent has clearly violated the circular, according to the High Court, and it was found to be just and proper to give the petitioner a fair chance to explain three open questions within a reasonable timeframe. Subsequently, the respondent may issue new orders after taking into account the petitioner’s entire explanation, including earlier explanations that it had provided.
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