Unaware of GST Proceedings due to Lack of Communication by Consultant: Madras HC quashes Ex parte Order, Remands on 20% Pre-deposit [Read Order]

The Madras High Court quashed the impugned ex parte GST ( Goods and Services Tax ). The matter was remanded back for reconsideration on 20% pre-deposit condition. The petitioner claimed that she was unaware of GST proceedings due to lack of communication by the consultant.

Petitioner Dhanasekaran Thenmozhi stated that she had enlisted the services of a consultant to manage her service tax compliances. However, due to the consultant's failure to keep her apprised of ongoing proceedings, Thenmozhi asserts that she remained unaware of the developments until being notified about the ex-parte order dated 23.09.2022.

Counsel for the petitioner argued that the order not only violated principles of natural justice but also failed to acknowledge the petitioner's eligibility for the threshold exemption of Rs. 10,00,000/-. As a condition for remand, the petitioner agreed to remit 20% of the disputed tax demand.

Responding to the petitioner's plea, Mr. Ramesh Kutty, learned senior standing counsel, pointed out that a show cause notice was duly issued to the petitioner on 21.10.2021, followed by multiple opportunities for personal hearings in 2022, all of which went unanswered. Therefore, he contended that no interference was warranted.

The petitioner contended that the lack of communication from the consultant left her unaware of the proceedings leading to the impugned order. Despite some doubts regarding the petitioner's explanation, the Court observed that confirming tax demands against individuals conducting business on a small scale without affording them a chance to be heard raised concerns.

Consequently, the bench of Justice Senthilkumar Ramamoorthy Court quashed the impugned order and remanded the matter for reconsideration. The petitioner was directed to remit 20% of the tax demand within two weeks and submit a reply to the show cause notice within the same period.

Upon receipt of the petitioner's reply and satisfaction of the remittance condition, the respondent was instructed to provide a reasonable opportunity for a fresh hearing and issue a new order within two months. The writ petition was disposed of on the above terms, with no order as to costs. Connected miscellaneous petitions were consequently closed.

Ms.P.Sangamithra for Mr.Joseph Prabakar appeared for Petitioner and Mr.Ramesh Kutty appeared for the department side.

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