In a recent ruling, the Madras High Court quashed an adverse GST order against an assessee observing a violation of the GST Act’s provisions regarding fair hearings.
The court’s decision, delivered on August 13, 2024, stemmed from a writ petition filed by the petitioner/assessee, Krith Enterprises l.
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The premise of the case arose from an adverse order issued by the State Tax Officer of the Sankari Assessment Circle on December 30, 2023 under Section 73 of the Central Goods and Service Tax Act, 2017 (CGST Act), concerning the financial year 2017-18. The assessee argued that the order was passed while denying them a fair opportunity to defend themselves, having been granted only one personal hearing prior to the deadline for submitting a reply to a show cause notice. The assessee- company claimed this practice contravened Section 75(5) of the GST Act, which mandates a minimum of four personal hearings.
Furthermore, the assessee contended that the Revenue uploaded important notices and orders to the GST portal, specifically in the “view additional notices and orders” section, which the assessee failed to access in a timely manner. This, the assessee asserted, further infringed upon their rights and constituted a breach of natural justice.
In response, the Special Government Pleader representing the respondent, the Revenue, argued that all necessary notifications had been properly issued via the GST portal. However, they did suggest that if the petitioner deposited 10% of the disputed tax demand, reconsideration of the matter could be entertained.
After evaluating the case, Justice Krishnan Ramasamy, presiding over the case, sided with the assessee noting that the company had not been given a sufficient opportunity for a personal hearing, and their submissions had not been adequately considered. Acknowledging the validity of the petitioner’s claims, the court quashed the December 30 order.
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The court further ordered the assessee to deposit 10% of the disputed tax demand within four weeks and remanded the matter back to the State Tax Officer for reconsideration. The assessee-company was instructed to submit its reply within two weeks of receiving the court’s order, after which the authorities were required to send a physical notice with at least 14 days’ notice for the next hearing.
In result, the appeal was dismissed.
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