GST Liability confirmed due to Non-Response to SCN: Madras HC remands for Reconsideration on 10% Pre-deposit [Read Order]

In a recent ruling, the Madras High Court remanded the matter and set aside the GST ( Goods and Services Tax ) order was confirmed by the authorities due to non-response to the SCN ( Show Cause Notice ) in relation to disparity in the GST Returns.

The Petitioner, Yesem Marketing, represented by its Proprietrix claimed she couldn't respond to a show cause notice due to personal difficulties, thereby necessitating this writ petition.

The petitioner's counsel submitted that statutory rules were violated, as the action was initiated solely based on discrepancies between the GSTR 1 statement and GSTR 3B returns. Counsel asserts that given a chance, the petitioner can demonstrate why the tax proposal should be dropped. As a condition for remand, the petitioner agrees to remit 10% of the disputed tax demand.

Mrs. K. Vasanthamala, representing the respondent, contended that the impugned order followed a show cause notice issued on 13th March 2023, along with multiple reminders. It was argued that Rule 88C of the Central Goods and Services Tax Rules, 2017, cited by the petitioner's counsel, is not applicable to this case since it pertains only to assessments post-7th January 2022.

The court found that the confirmed tax proposal was based solely on the GSTR mismatch between the GSTR 1 statement and the GSTR 3B return due to the petitioner's non-response to the notice or attendance at the hearing.

The bench of Justice Senthilkumar Ramamoorthy set aside the order dated 17th October 2023 and remanded the matter for reconsideration. However, this remand is contingent upon the petitioner remitting 10% of the disputed tax demand within two weeks. Within this timeframe, the petitioner is permitted to respond to the show cause notice.

Once the respondent receives the reply and confirms receipt of the 10% remittance, the respondents were directed to provide a fair opportunity, including a personal hearing to the petitioner. Accordingly the writ petition was disposed of.

Mr.R.Ganesh Kanna appeared for the petitioner.

To Read the full text of the Order CLICK HERE

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates