Failure to Reply to Form ASMT 10 and SCN invites GST Demand Order: Madras HC sets aside Order on Pre-deposit Condition [Read Order]

The Madras High Court has set aside the Goods and Services Tax ( GST ) order on 10% Pre-deposit Condition as the petitioner failed to reply to Form ASMT 10 and Show Cause Notice ( SCN ) in form DRC -01.

The petitioner, Malaysia Metals, engaged in wholesale and retail trading of unroasted iron pyrites, pig iron, and related products, asserts ignorance of proceedings initiated via notice in Form GST ASMT 10 and show cause notice in Form GST DRC-01. The petitioner claimed awareness of these proceedings only upon receipt of a bank attachment notice dated 30.01.2024.

Counsel for the petitioner argued that the petitioner was entitled to file the annual return for the assessment period 2022-2023 by 31.12.2023, yet the impugned order was issued before this deadline lapsed. Upon instructions, counsel for the petitioner proposed remitting 10% of the disputed tax demand as a condition for remand.

Mr. T.N.C. Kaushik, Additional Government Pleader, representing the 1st respondent, Assistant Commissioner (ST) (FAC), acknowledged the issuance of multiple opportunities to the petitioner as indicated in the impugned order.

Despite the petitioner's failure to respond to the notices, it is admitted that the petitioner was not heard before the issuance of the impugned order.

Considering the petitioner's lack of prior hearing, a Single bench of Justice Senthilkumar Ramamoorthy court intervened by setting aside the impugned order dated 28.08.2023, remanding the matter for reconsideration. The petitioner is directed to remit 10% of the disputed tax demand within 15 days of receiving a copy of this order.

Furthermore, the petitioner is granted the opportunity to respond to the show cause notice within the same period. Upon receipt of the petitioner's reply and confirmation of the remitted amount, the 1st respondent is instructed to provide a reasonable opportunity, including a personal hearing, and issue a fresh order within two months.

Additionally, as the impugned order is set aside, so as the bank attachment. If any amounts were appropriated from such a bank account before the order was issued, such amounts shall be retained subject to the outcome of the remanded proceedings. The writ petition is disposed of accordingly, with no costs imposed.

To Read the full text of the Order CLICK HERE

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