Unaware of GST Proceedings on Wrongful ITC Availment: Madras HC remanded for Reconsideration on 10% Pre-deposit Condition [Read Order]

The Madras High Court remanded the matter for reconsideration on 10% pre-deposit observing that the petitioner was not heard before GST ( Goods and Services Tax ) assessment order was issued because the petitioner did not reply to the show cause notice or avail of the personal hearing.

The Petitioner, Pranav Industries submitted that the tax proposal pertains to alleged wrongful availment of Input Tax Credit ( ITC ). He contended that the petitioner has all necessary documents to establish that the goods were received by the petitioner and that amounts due in respect hereof, including tax, were remitted to the supplier concerned.

Further stated that if provided an opportunity, he submits that the petitioner would be in a position to establish that only eligible ITC was claimed. On instructions, the counsel submitted that the petitioner agrees to remit 10% of the disputed tax demand as a condition for remand.

Mr. V. Prashanth Kiran, Government Advocate, accepts notice for the 1st respondent. He pointed out that the impugned order was preceded by an intimation dated 05.09.2023, show cause notice dated 14.09.2023 and personal hearing notices were issued to the petitioner.

The bench of Justice Senthilkmuar Ramamoorthy, examining the impugned order observed that the petitioner was not heard before such order was issued because the petitioner did not reply to the show cause notice or avail of the personal hearing. Recognizing the necessity of affording the petitioner an opportunity to contest the tax demand on its merits, the court deemed it appropriate to set aside the impugned order, subject to certain conditions.

The court ordered the remand of the matter for reconsideration, with the condition that the petitioner remit 10% of the disputed tax demand within two weeks. Additionally, the petitioner was permitted to submit a reply to the show cause notice within the same timeframe. Once the respondent received the petitioner's reply and confirmed the receipt of the 10% disputed tax demand, they were directed to provide a reasonable opportunity for a personal hearing and issue a fresh order within three months.

On setting aside the assessment order, the bank attachment was lifted. The court disposed of the petition. Mr.Rameshkumar Chopra and   Mr.V.Prashanth Kiran, Govt. Adv. ( T ) appeared for the petitioner and respondents.

To Read the full text of the Order CLICK HERE

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