The Madras High Court recently granted a final opportunity to a petitioner to address non-payment of interest on delayed payment and the GST Returns mismatch.
The writ petition challenged an order dated January 11, 2024, issued by the first respondent-The State Tax Officer (Int), Adj & Legal,, on grounds of violation of natural justice.
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The petitioner, Ramesh Associates engaged in providing works contract services for Indian Oil Corporation and Hindustan Petroleum, alleged that the discrepancies pertained to the 2017-18 financial year.
A surprise inspection on July 4, 2023, revealed two key issues: (i) mismatch between GSTR-3B and GSTR-2A and (ii) non-payment of interest on delayed tax payments.
Despite receiving an intimation in Form DRC-01A on September 11, 2023, and a subsequent notice in DRC-01 on September 26, 2023, the petitioner failed to respond.
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The petitioner contended that neither the show cause notices nor the assessment order were served by post or personal tender but were merely uploaded on the GST portal, leaving them unaware of the proceedings.
The petitioner sought an opportunity to explain the discrepancies, relying on a recent High Court judgment in M/s. K. Balakrishnan, Balu Cables v. O/o. Assistant Commissioner of GST & Central Excise, where a similar matter was remanded after a 25% deposit of the disputed tax.
Considering these submissions and arguments, Justice Mohammed Shaffiq set aside the impugned order and directed the petitioner to deposit 25% of the disputed tax.
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The court directed to treat assessment order as a show cause notice, allowing the petitioner to file objections within the same timeframe. The GST department was instructed to consider these objections and pass a fresh order after a reasonable hearing.
The bench clarified that failure to comply with the deposit or objection deadlines would result in the restoration of the assessment order resulting in the confirmation of the demand. The writ petition was disposed of accordingly.
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