Failure to Reply SCN showing GSTR Descripancies is as Uploaded Solely on GST Portal: Madras HC permits contesting demand with 10% pre-deposit [Read Order]

The Madras High Court Allows Contestation of Demand Order on 10% Pre-Deposit Condition Due to Alleged Failure to Respond to Show Cause Notice ( SCN ) with Goods and Services Tax Returns ( GSTR ) Discrepancies Uploaded on Goods and Services Tax ( GST ) Portal.

The petitioner, Sanjai Gandhi, involved in supplying water purifiers and R.O. systems along with related services, faced a tax dispute triggered by discrepancies noted in their GST returns. Initially, a notice in Form GST ASMT 10 was issued on 13.12.2021, to which the petitioner responded on 12.01.2022. However, subsequent intimations or show cause notices were allegedly uploaded solely on the GST portal and not served on the petitioner through any other mode.

The petitioner's counsel provided a detailed explanation upon receiving the initial notice. They also expressed the petitioner's willingness to remit 10% of the disputed tax demand as a condition for reconsideration.

Mr. V. Prashanth Kiran, representing the government, acknowledged receipt of notice and pointed to multiple opportunities given to the petitioner to contest the tax demand.

Upon examination of the impugned order, the court noted that the confirmed tax demand stemmed from disparities in Input Tax Credit ( ITC ) claimed by the petitioner compared to GSTR 2B, without affording the petitioner an opportunity to be heard. In light of the petitioner's agreement to the 10% remittance condition, the court deemed it just and necessary to provide them with an opportunity.

Consequently, a single bench of Justice Senthilkumar Ramamoorthy set aside the impugned order, contingent upon the petitioner remitting 10% of the disputed tax demand within two weeks from the receipt of the court's order.

Additionally, the petitioner was allowed to submit a reply to the show cause notice within the same period. Once the remittance was confirmed and the reply received, the respondent was directed to afford the petitioner a reasonable opportunity, including a personal hearing, and subsequently issue a fresh order within two months.

To Read the full text of the Order CLICK HERE

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