The Madras High Court has set aside and directed re-adjudication of a Goods and Services Tax ( GST ) demand order because the petitioner was unaware of it until their bank account was frozen, constituting a breach of principles of natural justice.
The dispute arises from a GST demand order issued by the Deputy Commercial Tax Officer due to a discrepancy between the petitioner’s GSTR-3B return and the auto-populated GSTR-2A.
The petitioner, Vishagan Architectural Solution, asserted that they were not aware of the impugned order until his bank informed him that his current account was frozen at the instance of the second and third respondents.
Mr. T.N.C. Kaushik, Additional Government Pleader representing the respondents, countered that the department followed proper procedure. He referred to the official record, which included the issuance of a show cause notice and subsequent personal hearing notices.
The tax proposal was confirmed due to the petitioner’s non-response to the show cause notice. However, considering the petitioner’s claim of being unaware, the court found that the interest of justice warrants that the petitioner be provided an opportunity, observed Justice Senthilkumar Ramamoorthy.
The court set aside the impugned order, and the matter is remanded to the respondent for reconsideration, subject to specific conditions. The petitioner was directed to remit 10% of the disputed tax demand within 15 days from the date of receipt of a copy of this order as a pre-condition for re-adjudication.
The petitioner was also permitted to submit a reply to the show cause notice within the same 15-day period.
The respondent was directed to provide an opportunity to the petitioner, including a personal hearing, and thereafter issue a fresh order within three months from the date of receipt of deposit and petitioner’s reply.
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