The Madras High Court set aside an order issued due to the petitioner’s lack of awareness of GST proceedings on the comparison of GSTR 3B returns and Form 26AS, as their factory had been closed for a long time.
The petitioner, M/s. Urbane Industries Limited, challenged an order issued by the State Tax Officer for the assessment period 2017-2018. The petitioner asserted that their factory had been closed for a long time, resulting in their unawareness of the proceedings until a recent phone call was received. Consequently, the petitioner could not contest the tax demand on merits.
The petitioner, represented by J. Shankarraman, argued that the show cause notice and impugned order were uploaded on the portal but not communicated to the petitioner through any other mode.
It was further argued by the petitioner that the impugned order was unreasoned and merely confirmed the tax proposal. On instructions, the petitioner agreed to remit 10% of the disputed tax demand as a condition for remand.
T.N.C. Kaushik, counsel for the respondent, submitted that the principles of natural justice were complied with. A notice in Form ASMT-10 was issued to the petitioner upon scrutiny of the returns, followed by a show cause notice and a personal hearing notice.
Justice Senthilkumar Ramamoorthy found that the tax proposal was based on a comparison of the petitioner’s GSTR 3B returns and Form 26AS. The proposal was confirmed because the petitioner did not respond to the show cause notice. The court determined that the interest of justice warranted an opportunity to contest the tax demand on merits.
The High Court set aside the impugned order, and the matter is remanded for reconsideration on the condition that the petitioner remits 10% of the disputed tax demand as agreed to within a period of four weeks from the date of receipt of a copy of this order.
The petitioner was also permitted to submit a reply to the show cause notice, and the respondent was directed to provide a reasonable opportunity to the petitioner, including a personal hearing, and thereafter issue a fresh order within three months from the date of receipt of the petitioner’s reply.
The writ petition is disposed of on the above terms without any order as to costs. Consequently, connected miscellaneous petitions are closed.
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