The Madras High Court orders pre-deposit of 10% of the disputed demand to nullify the contested order. The court’s decision came in light of the assessee’s non-participation in the Goods and Services Tax ( GST ) proceedings, resulting in the confirmation of liability along with a hefty 100% penalty.
The writ petition challenged the GST assessment order dated 26.04.2023. The petitioner submitted that due to technical issues with accessing the portal, they were unable to respond to the intimation dated 08.12.2022 or the show cause notice dated 28.12.2022. Consequently, the impugned order dated 26.04.2023 was issued without the petitioner having an opportunity to contest the tax proposal on its merits.
The petitioner’s counsel argued that the tax proposal was confirmed, and a penalty amounting to 100% of the tax was imposed. Emphasising the lack of opportunity for the petitioner to present their case, the counsel requested that the petitioner be given a chance to contest the tax proposal. The petitioner, expressed willingness to remit 10% of the disputed tax demand as a condition for a remand.
Responding to the petition, T.N.C. Kaushik, Additional Government Pleader, accepted notice for the respondent. He pointed out that the petitioner had availed Input Tax Credit concerning goods covered under relevant GST enactments. Additionally, he highlighted that the impugned order followed a series of notices and a show cause notice in Form GST ASMT 10.
A single bench of Justice Senthilkumar Ramamoorthy noted that the GST proposal related to the purchase of a motor vehicle, accompanied by a 100% penalty was confirmed due to the non-participation in GST proceedings. The Court deemed it just and appropriate to provide the petitioner with an opportunity, albeit with conditions.
Consequently, the Madras High Court set aside the impugned order subject to the condition that the petitioner remit 10% of the disputed tax demand within two weeks from the receipt of the order.
Additionally, the petitioner was permitted to submit a reply to the show cause notice within the stipulated period. Upon satisfaction of the remittance and receipt of the petitioner’s reply, the respondent was directed to grant a reasonable opportunity to the petitioner, including a personal hearing, and issue a fresh assessment order within three months.
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