In a recent ruling, the Madras High Court set aside the GST (Goods and Services Tax) demand order due to lack of hearing opportunity on a pre-deposit condition as petitioner failed to participate in the proceedings due to unaware of notices issued.
The petitioner, GLAMOUROSE filed the writ petition challenging the orders on the ground that the petitioner was not provided a reasonable opportunity to contest the tax demand on merits. It was claimed that the show cause notice and other communications were only uploaded on the GST portal and not communicated to the petitioner through any other mode, the present writ petition was filed.
The petitioner’s counsel argued that given an opportunity, the petitioner could explain the discrepancies between the GSTR 3B return and the GSTR 1 statement. Additionally, the petitioner expressed willingness to remit 10% of the disputed tax demand as a condition for the remand.
Principles of natural justice were followed to by issuing a notice in Form ASMT 10 on July 31, 2023, a show cause notice on September 26, 2023, and a personal hearing notice on the same date, contended the Respondent’s counsel.
The bench of Justice Senthilkumar Ramamoorthy observed that the tax proposal, which focused on the disparity between the petitioner’s GSTR 3B return and GSTR 1 statement, was confirmed due to the petitioner’s lack of response to the show cause notice. The petitioner contended that the failure to participate in the proceedings was due to being unaware of them.
Further, the court decided to set aside the order and remand the matter for reconsideration. This decision was contingent upon the petitioner remitting 10% of the disputed tax demand within two weeks from the receipt of a copy of the order. The petitioner was also allowed to submit a reply to the show cause notice within this period.
Mr.R.Saravanan appeared for the petitioner and Mr.V.Prashanth Kiran, Govt. Adv. (T) appeared for the respondents.
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