Two GST Demand Orders issued for same Financial Year with Different Amounts: Madras HC sets aside Order on Pre-deposit Condition [Read Order]

The Madras High Court has set aside two GST demand orders issued for the same financial year 2017-2018 on pre-deposit condition.

The petitioner, a partnership firm, challenged the orders dated 28.12.2023 and 29.12.2023, which were issued by the respondent with different tax amounts for the same assessment year. The first order demanded a payment of Rs. 51,55,850, while the second order, issued the very next day, demanded a higher amount of Rs. 76,67,884.

The respondent-GST dept issued an audit observation notice on 12.09.2023, stating that Rs. 50,65,982 was due for the financial year 2017-2018. Just two days later, on 14.09.2023, a penalty of Rs. 5,00,000 was imposed without any notice.

Complete Supreme Court Judgment on GST from 2017 to 2024 with Free E-Book Access, Click here

This was followed by a show cause notice on 25.09.2023, demanding Rs. 76,67,884. Despite the petitioner filing a reply to the demand, the respondent allegedly failed to consider it. Furthermore, the petitioner argued that the financial year was erroneously stated as 2018-2019 in the 29.12.2023 order, adding to the confusion.

The petitioner contended that issuing two different orders for the same assessment year violated natural justice, as no proper hearing or opportunity to respond was provided. The petitioner expressed willingness to deposit 10% of the disputed tax if given an opportunity to submit the necessary documents and objections to substantiate their claims.

Complete Supreme Court Judgment on GST from 2017 to 2024 with Free E-Book Access, Click here

Justice Krishnan Ramasamy found that the respondent had indeed passed the orders without proper application of mind and in violation of the principles of natural justice. Consequently, the Court set aside both the orders and remanded the matter to the respondent for fresh consideration.

The Court directed the petitioner to pay 10% of the disputed tax within four weeks, and the respondent was instructed to re-do the assessment after receiving the petitioner’s objections and conducting a personal hearing. The fresh order is to be passed after giving the petitioner a clear 14-day notice for the hearing.

Mr.R.Prakalathan for Mr.M.R.Radhakrishnan and Mrs.K.Vasanthamala appeared for the petitioners and the respondents respectively.

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