The Madras High Court has issued a directive for the reconsideration of a case concerning the confirmation of tax liability due to a discrepancy between GSTR 3B and GSTR 1 returns. This decision stems from the petitioner’s lack of awareness of GST proceedings until the entire tax liability was recovered from their bank account.
The petitioner, Tristar Logistics in this case, claimed ignorance of the proceedings leading to the impugned order until being notified by their bank, Standard Chartered Bank. Consequently, the writ petition was filed based on these circumstances.
The petitioner’s counsel argued that their client was unable to respond to the show cause notice or attend the personal hearing due to lack of awareness. He highlighted that although the notice and order were uploaded on the portal, no other mode of communication was utilized to inform the petitioner. The impugned order resulted in the attachment of the petitioner’s bank account and the appropriation of the entire tax liability, including penalties, from it.
Responding to the petition, Mr. V. Prashanth Kiran, Government Advocate, representing respondents 1 & 2, acknowledged that the petitioner was issued an intimation in August 2023, with the show cause notice following on 16.08.2023. He further stated that a personal hearing was provided in September 2023 before issuing the impugned order.
Upon examining the impugned order, a Singl bench of Justice Senthilkumar Ramamoorthy observed that the tax liability arises from a discrepancy between the GSTR 3B and GSTR 1 returns. Notably, the tax proposal was confirmed without the petitioner’s participation, and the entire liability was realised by appropriating funds from their bank account, ensuring full revenue interest.
Considering these factors, the court deemed it just and appropriate to afford the petitioner an opportunity to contest the tax demand on its merits. Consequently, the impugned order dated 06.10.2023 was set aside, and the matter was remanded for reconsideration. The petitioner was granted two weeks to submit a reply, following which the 1st respondent was directed to provide a reasonable opportunity for a personal hearing and issue a fresh order within three months.
The court also clarified that any amounts appropriated from the petitioner’s bank account would be subject to the outcome of the remanded proceedings. Accordingly, the writ petition was disposed of.
The Madras High Court has issued a directive for the reconsideration of a case concerning the confirmation of tax liability due to a discrepancy between GSTR 3B and GSTR 1 returns. This decision stems from the petitioner’s lack of awareness of GST proceedings until the entire tax liability was recovered from their bank account.
The petitioner, Tristar Logistics in this case, claimed ignorance of the proceedings leading to the impugned order until being notified by their bank, Standard Chartered Bank. Consequently, the writ petition was filed based on these circumstances.
The petitioner’s counsel argued that their client was unable to respond to the show cause notice or attend the personal hearing due to lack of awareness. He highlighted that although the notice and order were uploaded on the portal, no other mode of communication was utilized to inform the petitioner. The impugned order resulted in the attachment of the petitioner’s bank account and the appropriation of the entire tax liability, including penalties, from it.
Responding to the petition, Mr. V. Prashanth Kiran, Government Advocate, representing respondents 1 & 2, acknowledged that the petitioner was issued an intimation in August 2023, with the show cause notice following on 16.08.2023. He further stated that a personal hearing was provided in September 2023 before issuing the impugned order.
Upon examining the impugned order, a Singl bench of Justice Senthilkumar Ramamoorthy observed that the tax liability arises from a discrepancy between the GSTR 3B and GSTR 1 returns. Notably, the tax proposal was confirmed without the petitioner’s participation, and the entire liability was realised by appropriating funds from their bank account, ensuring full revenue interest.
Considering these factors, the court deemed it just and appropriate to afford the petitioner an opportunity to contest the tax demand on its merits. Consequently, the impugned order dated 06.10.2023 was set aside, and the matter was remanded for reconsideration. The petitioner was granted two weeks to submit a reply, following which the 1st respondent was directed to provide a reasonable opportunity for a personal hearing and issue a fresh order within three months.
The court also clarified that any amounts appropriated from the petitioner’s bank account would be subject to the outcome of the remanded proceedings. Accordingly, the writ petition was disposed of.
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