The Madras High Court set aside a GST assessment order due to the failure of the GST authorities to provide a hearing and consider the reply of the petitioner in the wrongly claimed ITC ( Input Tax Credit ) under the IGST ( Integrated Goods and Services Tax ) Act, 2017.
The petitioner-assessee, Raj Guru wrongly claimed ITC under the IGST Act while filing monthly returns for March 2018. This mistake was rectified by reversing the ITC claim in April 2018, and annual returns for the 2017-18 assessment year were subsequently filed in Form GSTR-9.
Despite these corrections, the GST department initiated proceedings against the petitioner and uploaded a show cause notice under “Additional Notices and Orders” on the GST portal. The petitioner, unaware of this notice, failed to file a timely response. Consequently, without granting a personal hearing, the respondent passed the impugned order on 19th September 2023.
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The assessee argued that the impugned order violated principles of natural justice, as neither the reply nor an opportunity for a hearing was provided before the order was passed. The petitioner also submitted that replies dated 23rd and 28th February 2024 had been filed after the order was passed, but these were not considered by the authorities.
Justice Krishnan Ramasamy, agreeing with the petitioner, observed that the department had not granted a personal hearing or considered the replies.
The court ruled that the impugned order was passed in violation of natural justice principles. It directed the petitioner to submit a fresh copy of their reply along with relevant documents within one week. The respondent was ordered to issue a fresh notice, provide a personal hearing, and pass appropriate orders based on merit within two weeks of receiving the reply. Further set aside the impugned order.
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