The Madras High Court has quashed the DRC-07 order issued by the Goods and Services Tax ( GST ) officers without hearing the petitioner/taxpayer which arises from the discrepancies in GSTR 3B and GSTR 2B. The bench remanded the matter back for reconsideration.
The petitioner received a show cause notice, regarding inconsistencies between their GSTR 3B and GSTR 2B. However, due to reliance on a GST consultant who failed to keep the petitioner informed, no response was submitted.
Consequently, the assessment order was issued without granting the petitioner a chance to be heard. Subsequently, a recovery notice was served, resulting in the appropriation of approximately Rs.5,39,000/- from the petitioner’s bank account, prompting the filing of a writ petition.
During the proceedings, the petitioner’s counsel submitted that while the confirmed tax liability amounted to Rs.10,89,028/-, only about Rs.5,39,000/- was recovered from the petitioner’s account. It was argued that the petitioner had submitted a reply, seeking another opportunity to present their case.
Responding to the petition, K. Vasanthamala, representing the government, argued that various notices were issued to the petitioner, including an intimation, a show cause notice, and a personal hearing/reminder notice. She contended that sufficient opportunities had been provided to the petitioner, warranting no interference.
Upon examining the documents, including the petitioner’s bank statement showing deductions towards tax liability, the court noted that approximately 50% of the tax liability had been appropriated from the bank account. Considering this significant deduction and the lack of opportunity for the petitioner to be heard before the issuance of the assessment order, the court deemed it necessary to set aside the order.
A single bench of Justice Senthilkumar Ramamoorthy ruled to remand the matter for reconsideration. The petitioner was granted a period of 15 days from the receipt of the court’s order to submit a reply to the show cause notice, along with all relevant documents.
The respondent was directed to provide the petitioner a reasonable opportunity, including a personal hearing, before issuing a fresh order within two months from the receipt of the petitioner’s reply. As a result of the assessment order being quashed, the bank attachment was lifted.
Consequently, the writ petition was disposed of with no order as to costs, and connected miscellaneous petitions were closed accordingly.
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