The Madras High Court has ordered a reconsideration of the matter on 10% pre-deposit condition related to the mismatch between GSTR 3B and GSTR 2A, following a failure to respond to the Show Cause Notice ( SCN ).
The petitioner, Crystal Granites challenged the order on the grounds that the show cause notice and the impugned order were only uploaded on the “View Additional Notices and Orders” tab of the GST portal and were not communicated through any other means.
The petitioner’s counsel Mr.B.Raveendran submitted that the petitioner was deprived of a reasonable opportunity to contest the tax demand because they were unaware of the show cause notice.
The counsel also contended that the ingredients of Section 74 of the applicable GST enactments were not satisfied and that the proceedings were barred by limitation. However, the petitioner agreed to remit 10% of the disputed tax demand as a condition for the case to be reconsidered.
Mr. V. Prasanth Kiran, the Government Advocate, accepted notice for the respondent and clarified that the impugned order was preceded by a show cause notice and a personal hearing offered in November 2023. He also submitted that the order was issued under Section 74 of the GST acts, thus not barred by limitation.
The bench of Justice Senthilkumar Ramamoorthy found that the tax proposal came from mismatches between the petitioner’s GSTR-3B returns and the auto-populated GSTR-2A. The tax demand was confirmed due to the petitioner’s failure to respond to the show cause notice or attend the personal hearing.
The High Court set aside the impugned order dated January 5, 2024. The petitioner is required to remit 10% of the disputed tax demand within two weeks from receiving a copy of the court’s order and is permitted to submit a reply to the show cause notice within this period.
The respondent- GST department was directed to offer the petitioner a reasonable opportunity to present their case, including a personal hearing, and to issue a fresh assessment order within three months from the petitioner’s reply on confirmation of the 10% payment. The writ petition was disposed of accordingly.
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