The Madras High Court remanded the Goods and Services Tax ( GST ) demand for reconsideration on 10% pre-deposit condition as rectification was filed on error in reporting outward supplies and Input Tax Credit ( ITC ).
The Petitioner, Vaji Motor, a dealer in agricultural implements and related spare parts, asserted that they were unaware of the proceedings leading to the impugned order. They highlighted that notices and orders were only accessible via the “View Additional Notices and Orders” tab on the GST portal. Following the filing of a rectification petition on 08.08.2023, the petitioner pursued legal recourse through the present writ petition.
During the proceedings, the petitioner’s counsel outlined an inadvertent error in reporting outward supplies and Input Tax Credit ( ITC ) in November 2017. It was clarified that the error had been rectified in the annual return filed in Form GSTR 9 and the ITC was reversed while filing the GSTR 3B for March 2020. The petitioner expressed readiness to remit 10% of the disputed tax demand as a condition for remand, demonstrating a cooperative approach to resolving the issue.
The Government Advocate representing the respondent pointed out that a notice in Form ASMT 10 had been issued to the petitioner in March 2023, following discrepancies in their returns. The impugned order was preceded by a show cause notice dated 10.05.2023, to which the petitioner did not respond. However, considering the rectification efforts made by the petitioner and the timing of the error correction, the court deemed it necessary to provide another opportunity to contest the tax proposal.
The court noted that the tax proposal was confirmed due to the petitioner’s failure to file objections to the show cause notice or attend a personal hearing. In light of the rectification made by the petitioner, the court deemed it just to remand the matter for reconsideration, subject to the condition of remitting 10% of the disputed tax demand within two weeks from the receipt of the court’s order.
Furthermore, the petitioner was granted the opportunity to submit a reply to the show cause notice within the specified period. Once the remittance and reply were received, the respondent was directed to provide a reasonable opportunity, including a personal hearing, and issue a fresh order within three months. Accordingly, the writ petition was disposed of.
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