In a recent ruling, the Madras High Court granted an opportunity for a personal hearing on 10% pre-deposit to a petitioner challenging the assessment order related to the financial year 2019-20 concerning the issue of input tax credit ( ITC ) claimed from the cancelled dealers, return defaulters and the non-taxpayers.
The petitioner, Hotel Southern Comfort, a partnership firm engaged in the hospitality business and registered under the GST Act, faced allegations of discrepancies in tax liability and input tax credit claims.
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After scrutiny of records such as GSTR-1, GSTR-2A, GSTR-3B, and E-way Bills, five major defects were identified, including under-declared tax liability, excess and invalid ITC claims, ITC claimed from canceled dealers, return defaulters, and non-tax payers, and interest on delayed payments of GSTR-3B by the GST Department.
Despite being issued multiple notices and reminders, the petitioner neither responded nor attended personal hearings, resulting in the issuance of the impugned assessment order.
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The petitioner contended that the notices and order were not served through registered post or personal delivery but merely uploaded on the GST portal, leaving them unaware of the proceedings. The court noted a similar case, Sree Manoj International vs. Deputy State Tax Officer (April 25, 2024), where the matter was remanded upon a 10% pre-deposit of the disputed tax.
Justice Mohammed Shaffiq set aside the impugned order, directing the petitioner to deposit 10% of the disputed tax. The court also directed the petitioner to treat the assessment order as a show cause notice, allowing the petitioner to submit objections and supporting documents.
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The court also ordered the immediate lifting of the petitioner’s bank account attachment upon compliance with the pre-deposit condition. Mr.R.Sivaraman and Mr.Harsha Raj Additional Government Pleader appeared before the court for petitioner and respondents respectively.
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