Tax Liability confirmed on GSTR 3B and 2A Mismatch: Madras HC grants Hearing Opportunity on 10% Pre-deposit [Read Order]

The Madras High Court has granted a hearing opportunity, contingent upon a 10% pre-deposit, in a case where a tax liability was confirmed due to a mismatch between GSTR 3B and GSTR 2A.

An order in original dated 16.12.2023 was assailed on the ground that the petitioner was not provided a reasonable opportunity to contest the tax demand on merits. By asserting that the petitioner was unaware of proceedings since the show cause notice and other communications were uploaded on the portal and not communicated through any other mode, the present writ petition was filed.

Mr.S.Ramanan representing the petitioner seeks another opportunity to contest the tax demand on merits. On instructions, he submits that the petitioner agrees to remit 10% of the disputed tax demand as a condition for remand.

Mr.C.Harsha Raj, Additional Government Pleader, accepted notice for respondents 1 & 2. He submitted that principles of natural justice were complied with by issuing show cause notice dated 30.09.2023 and by offering a personal hearing.

On examining the impugned order, it appears that the tax proposal pertains to a mismatch between the petitioner's GSTR 3B returns and the auto-populated GSTR 2A. In view of the assertion that the petitioner could not participate in proceedings on account of being unaware of the same, the interest of justice warrants that an opportunity be provided to the petitioner to contest the tax demand on merits by putting the petitioner on terms.

The single bench of Justice Senthil Kumar Ramamoorthy noted that the impugned order dated 16.12.2023 was set aside and the matter was remanded for reconsideration subject to the condition that the petitioner remits 10% of the disputed tax demand as agreed to within a period of 15 days from the date of receipt of a copy of this order. The petitioner was permitted to submit a reply to the show cause notice within the aforesaid period. Upon receipt of the petitioner's reply and upon being satisfied that 10% of the disputed tax demand was received, the 1 st respondent was directed to provide a reasonable opportunity to the petitioner, including a personal hearing, and thereafter issue a fresh order within a period of three months from the date of receipt of the petitioner's reply. In view of the assessment order being set aside, the bank attachment was raised.

Accordingly, the writ petition was disposed of, consequently, connected miscellaneous petitions were closed.

To Read the full text of the Order CLICK HERE

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates