Madras HC quashes GST Assessment Order as Confirmed Tax Liability Exceeds Amount in SCN by Rs. 69L [Read Order]

In a recent ruling, the Madras High Court quashed a Goods and Services Tax ( GST ) Assessment Order, citing a significant discrepancy between the confirmed tax liability and the amount specified in the Show Cause Notice ( SCN ).

The petitioner, Aristo Telemedia Pvt. Ltd  had received a show cause notice dated 30.05.2023, demanding a sum of Rs.39,34,549 towards tax and reversal of input tax credit. However, upon reply on 12.08.2023, the impugned GST Assessment order issued on 30.12.2023  deviated from the initial demand to Rs. 1,08,47,012.

The counsel representing the petitioner brought forth multiple challenges against the impugned order. Foremost among these was the glaring disparity between the total demand stipulated in the show cause notice and the tax liability levied in the impugned order. Additionally, the petitioner underscored the absence of a personal hearing prior to the issuance of the impugned order, raising concerns about procedural fairness and due process.

Another significant contention raised by the petitioner pertained to the discrepancy stemming from the imposition of tax on "other expenses," which was based on figures extracted from the profit and loss account.

Mrs. K. Vasanthamala, representing the respondent, accepted notice on behalf of the respondent and confirmed the details of the show cause notice.

Upon comparing the show cause notice with the impugned order,  the court observed that the confirmed tax liability substantially exceeded the amount specified initially.

Furthermore, the imposition of tax on the total amount of "other expenses" indicated in the profit and loss account was deemed unjustifiable. It was also noted that the petitioner was deprived of the opportunity to contest the revised tax liability.

A Single bench of Justice Senthilkumar Ramamoorthy of Madras High Court set aside the impugned GST Assessment order and remanded the matter for reconsideration. The respondent was directed to afford the petitioner a reasonable opportunity, including a personal hearing, and issue a fresh order within two months. Importantly, all contentions were left open for the petitioner to address during the remanded proceedings.

To Read the full text of the Order CLICK HERE

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