The Madras High Court set aside the Goods and Services Tax ( GST ) demand order, and the matter is remanded to the respondent for reconsideration, subject to 10% pre-Deposit condition. The order was challenged on the ground of a breach of the principles of natural justice.
The petitioner, represented by Mr. R. Swarnavel, filed a writ petition under Article 226 of the Constitution of India, seeking to quash the impugned order and to direct the respondent to reassess the case in light of documents submitted on 29.07.2023.
The petitioner, M/s. Sri Bhavani Electricals & Hardwares, is engaged in selling electrical and plumbing hardware and had opted for the composition scheme, filing annual returns in Form GSTR 4 and quarterly returns in Form CMP-08. Upon receiving a notice dated 15.07.2022 by registered post on 19.07.2022, the petitioner replied on 29.07.2022. However, a subsequent show cause notice dated 28.11.2022 was uploaded on the portal but not communicated to the petitioner through any other means.
R. Swarnavel, counsel for the petitioner, pointed out that the reply, indicating a turnover of Rs. 6,37,595/- as reported in Form CMP-08, was not considered in the impugned order. The impugned order had instead taken into account a turnover of Rs. 5,47,405/-, compared with the purchase value as per the supplier’s GSTR 1 statement. The tax proposal was confirmed based on the petitioner’s lack of response to the show cause notice.
The petitioner’s counsel also submitted that the petitioner was unaware of the show cause notice and sought another opportunity to participate, agreeing to remit 10% of the disputed tax demand as a condition for remand.
T.N.C. Kaushik, representing the respondent, contended that the principles of natural justice were complied with by issuing intimation and show cause notice.
Justice Senthilkumar Ramamoorthy observed that “in view of the assertion that the taxpayer could not participate in proceedings on account of being unaware of the same, the interest of justice warrants that the petitioner be provided an opportunity by putting the petitioner on terms.
Consequently, the court set aside the impugned order, subject to the condition that the petitioner remits 10% of the disputed tax demand within 15 days from the receipt of the court’s order. The petitioner was also permitted to submit a reply to the show cause notice within this period.
The respondent was directed to provide a reasonable opportunity for the petitioner, including a personal hearing, and thereafter issue a fresh order within three months from the date of receipt of the petitioner’s reply.
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