Unaware of GST Proceedings against Mismatch in GST Returns: Madras HC disposes of Petition on Pre-deposit Condition [Read Order]

In a recent ruling, the Madras High Court set aside and the matter is remanded to the respondent for reconsideration subject to the condition that the petitioner remits 10% of the disputed tax demand. The order was challenged on the grounds that the petitioner was denied a reasonable opportunity to contest the tax demand on its merits.

The Petitioner, Dharieneesh Housing Developers asserted that they were unaware of the proceedings leading to the impugned order because the notices and the final order were uploaded in the "View Additional Notices and Orders" tab on the GST portal, without proper notification.

During the hearing, the petitioner's counsel argued that the confirmed tax demand stemmed from a discrepancy between the GSTR-3B and the auto-populated GSTR-2A forms. The counsel further contended that the petitioner could prove that the Input Tax Credit ( ITC ) was validly availed if given a fair chance. The petitioner also agreed to remit 10% of the disputed tax demand as a condition for the case to be remanded.

On behalf of the respondent, Mrs. K. Vasanthamala, the Government Advocate argued that the impugned order was preceded by an intimation dated July 13, 2022, a show cause notice dated November 14, 2023, and a personal hearing notice.

The bench of Justice Senthilkumar Ramamoorthy noted that the tax proposal was confirmed due to the petitioner’s failure to respond to the show cause notice or attend the personal hearing. It recognized that the tax issue involved a mismatch between the returns filed by the petitioner and the auto-populated GSTR-2A.

On the submission of the petitioner that they possess necessary documents to prove the ITC claim, the court found it just to provide the petitioner another opportunity to contest the tax demand. The court, therefore, set aside the impugned order and remanded the matter for reconsideration, subject to the petitioner remitting 10% of the disputed tax demand within two weeks from receiving the court’s order.

The High Court also permitted the petitioner to submit a reply to the show cause notice within this period. Upon verifying the receipt of the 10% payment, the respondent was directed to offer the petitioner a reasonable opportunity to present their case, including a personal hearing, and subsequently issue a fresh order within three months from the petitioner's reply.

The writ petition was disposed of under these terms, with no order as to costs, and the connected miscellaneous petitions were also closed. Mr. G. Derrick Sam appeared for the petitioner.

To Read the full text of the Order CLICK HERE

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