Returns filed belatedly under GSTR-3B lead to GST Interest Demand: Madras HC remands Matter due to Lack of Proper Notice [Read Order]

In a recent ruling, the Madras High Court remanded the matter concerning Goods and Services Tax (GST) demand interest for belated filing under GSTR-3B due to lack of proper notice.

MKPO Metal Fabricators Pvt. Ltd., the petitioner engaged in manufacturing and registered under the Tamil Nadu Goods and Services Tax (GST) Act, 2017, filed a writ petition against the order issued by the respondent, Assistant Commissioner (ST)

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The respondent issued an order under Section 74 of the Goods and Services Tax (GST) Act for late filing of GSTR-3B returns, imposing interest liability on the petitioner amounting to Rs. 6,24,779.

The petitioner challenged the impugned order before the Madras High Court, arguing that the petitioner was unaware of the proceedings because the notices were uploaded only on the GST portal, without proper communication.

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The petitioner’s counsel submitted that the petitioner only became aware of the order in August 2024 after receiving recovery notices. The counsel contended that the impugned order was passed without affording them an adequate opportunity to respond.

On the contrary, the respondent’s counsel, Harsha Raj (Assistant Government Pleader) argued that proper notices were issued to the petitioner, giving them sufficient opportunity to participate in the adjudication process.

Since the petitioner failed to avail the opportunity, the order imposing the interest liability was valid. The respondent prayed to dismiss the writ petition.

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A single bench led by Justice N. Anand Venkatesh observed both sides' arguments and noted that the impugned order passed without sufficient opportunity.
The court referred to a similar case in W.P.No.26477 of 2024 where it was ruled that an opportunity should be afforded to the petitioner by setting the proceedings aside on certain conditions.

In the interest of justice and to maintain consistency, the court considered a similar approach in this case. Therefore, the court set aside the impugned order dated 29.11.2023 passed by the respondent.

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The matter was remanded to the respondent for fresh consideration on the condition that the petitioner must pay 10% of the total demand (Rs. 6,24,779) to the respondent within four weeks. If failed to do so, the respondent's order will automatically be revived.

The writ petition of the petitioner was allowed with no costs, and the connected Writ Miscellaneous Petitions were closed.

To Read the full text of the Order CLICK HERE 

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