Madras HC grants another Opportunity to Explain Unreconciled Turnover Pertains to non-GST items on Pre-deposit of Rs. 50 Lakhs [Read order]

The Madras High Court has granted another opportunity to the petitioner to explain the unreconciled turnover as they possess relevant documents on a pre-deposit condition of Rs. 50 lakhs.

The Petitioner, Prince Foundations Limited received a show cause notice on September 29, 2023, regarding unreconciled turnover amounting to approximately Rs. 58,34,25,862.65. Claiming inability to respond or participate due to proceedings initiated by its creditor under the SARFEASI Act, the petitioner challenges the subsequent order issued on December 26, 2023.

The Counsel for the petitioner highlighted the annual return and reconciliation statement in Form GSTR 9C, indicating that the unreconciled turnover pertains to non-GST items. He asserted the availability of necessary documents, such as completion certificates, to explain the turnover satisfactorily. The petitioner, willing to remit Rs. 50,00,000/- as a condition for remand, sought reconsideration.

Mr. T.N.C. Kaushik, Additional Government Pleader, asserted that the principles of natural justice were adhered to through the issuance of notices and reminders.

A single bench Justice Senthilkumar Ramamoorthy observed that the tax proposal concerns unreconciled turnover, noting the absence of response to the show cause notice. Recognizing the petitioner's claim of possessing relevant documents on unreconciled turnover, the court deemed it just to afford another opportunity, albeit with conditions, considering the petitioner's prior non-engagement.

Accordingly, the impugned order dated December 26, 2023, was set aside, conditional upon the petitioner remitting Rs. 50,00,000/- within three weeks of receiving a copy of this order. The petitioner was  permitted to submit a reply to the show cause notice within the same period, enclosing all relevant documents. Upon receipt of the petitioner's reply and confirmation of the remittance, the respondent was also directed to provide a reasonable opportunity, including a personal hearing, and issue a fresh order within two months.

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