The Madras High Court has ruled that the GST ( Goods and Services Tax ) order exceeded the boundaries of the Show Cause Notice ( SCN ) previously issued. The Court has instructed that the order be treated as an SCN and has mandated a 10% pre-deposit for reconsideration of the matter.
The assessee, Arivazhagan challenged the GST assessment order on the grounds of not providing the petitioner with a fair opportunity to contest the GST demand on its merits and that the order went beyond the scope of the original SCN.
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The petitioner submitted that he was unable to participate in the proceedings due to GST compliances being handled by an auditor who was critically unwell at the time.
Mrs.R.Hemalatha, the counsel of the petitioner, highlighted that the SCN proposed a tax liability totaling Rs.10,45,870, whereas the final demand was approximately Rs.20,08,000. Despite this discrepancy, the petitioner agreed to pay 10% of the disputed tax demand as outlined in the SCN.
The GST department’s counsel maintained that the principles of natural justice were upheld, referencing the issuance of an intimation and the SCN, while noting that the tax proposal encompassed a longer duration and was based on GSTR 7 returns filed by tax deductors.
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After hearing the submissions, the bench of Justice Senthilkumar Ramamoorthy concurred with the petitioner’s counsel that the impugned order extended beyond the SCN’s scope. Acknowledging the auditor’s medical emergency, the Court found it just to reconsider the matter.
It ruled that the petitioner should pay 10% of the tax demand as per the SCN to qualify for a remand.
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