Misses GST Hearings Despite SMS and Email Notices: Madras HC orders Reconsideration on 25% Pre-Deposit from ECR [Read Order]

In the case of failure to participate in personal hearings or participate in adjudication proceedings as outlined in the DRC-01 notice, the Madras High Court ruled partly in favour of the petitioner. It directed for reconsideration of matter on pre-deposit of 25% from the Electronic Cash Register.

The case centres on an impugned order dated 25.07.2023, covering the tax period from April 2020 to March 2021. The petitioner did not attend adjudication proceedings following the issuance of notice in Form DRC-01 on 17.03.2023, nor did they appear for scheduled personal hearings on 04.04.2023 and 14.07.2023, despite repeated notifications sent through electronic means.

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The petitioner’s counsel argued that the petitioner had a fair chance of success due to discrepancies in tax records, notably between the GSTR-01 and GSTR-07 returns of their employer.

Furthermore, the counsel pointed out that the petitioner’s GST registration was cancelled on 24.03.2021, with effect from 01.02.2021, rendering the petitioner unaware of prior notices leading to the impugned order. Awareness of the tax arrears only came after the respondent informed the petitioner, prompting them to download and examine the relevant details from the GST portal.

To support their request for a hearing, the petitioner’s counsel urged the Court to allow reasonable terms for explanation, arguing that the petitioner would have an opportunity to clarify their position if permitted to proceed.

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Conversely, the Government Advocate argued against the petition, highlighting that it was time-barred per the Supreme Court's rulings in GlaxoSmithKline Consumer Health Care Limited (2020) and Singh Enterprises (2008), which emphasize strict limitations under Section 107 of the GST Act.

Justice C. Sarvanan found merit in the petitioner’s case and partially ruled in their favor by setting aside the impugned order, directing the respondent to reassess the case on its merits. However, this decision is conditional upon the petitioner depositing 25% of the disputed tax amount from their Electronic Cash Register (ECR) within 30 days of receiving the order. The quashed order will serve as an addendum to the original show-cause notices.

The Court further instructed the petitioner to submit a response within 30 days, along with the required deposit. Following this, the respondent is to issue a fresh order on the merits of the case within two months, after allowing the petitioner a fair hearing.

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Mr.A.Satheesh Murugan and Mr.J.K.Jayaselan Government Advocate appeared for the petitioner and respondents respectively.

To Read the full text of the Order CLICK HERE

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