In a recent ruling, the Madras High Court mandated a 10% pre-deposit for the reconsideration of a case where the petitioner was unaware of Goods and Services Tax ( GST ) proceedings due to the failure of their GST consultant to inform them about the disparity between GSTR 3B and GSTR 2A.
The Petitioner, Muthu Traders engaged in trading groceries and allied products, claimed unfamiliarity with GST compliances and had relied on a consultant for such matters. Due to the consultant’s failure to inform the petitioner about the proceedings leading to the impugned order, the petitioner was unaware of the situation.
The Counsel for the petitioner contended that the confirmed tax demand stems from a discrepancy between the petitioner’s GSTR 3B returns and the auto-populated GSTR 2A. It was asserted petitioner’s capability to explain the discrepancy if given the opportunity, counsel states the petitioner’s willingness to remit 10% of the disputed tax demand as a condition for remand.
Mr. T.N.C. Kaushik, Additional Government Pleader, acknowledged the notices sent to respondents 1 & 2, highlighting that the impugned order followed an intimation, show cause notice, and a personal hearing notice.
A Single bench of Justice Senthilkumar Ramamoorthy observed that the tax liability arises from the mismatch between the petitioner’s GSTR 3B returns and the auto-populated GSTR 2A.
Furthermore, the tax demand was confirmed due to the petitioner’s failure to respond or appear for the personal hearing. Despite this, the court deems it just and necessary to grant the petitioner an opportunity to contest the tax demand on its merits.
Consequently, the impugned order was set aside, and the matter is remanded for reconsideration. This remand is subject to the condition that the petitioner remits 10% of the disputed tax demand within two weeks and submits a reply to the show cause notice within the same period.
Upon receipt of the petitioner’s reply and satisfaction of the remittance condition, the high court directed the respondents 1 & 2 are directed to provide a reasonable opportunity to the petitioner, including a personal hearing, and issue a fresh order within three months.
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