GST Demand Order Set Aside as Assessee was Unware of Show Cause Notice due to uploaded on view additional notices and orders Tab on GST Portal

By | January 25, 2025
(Last Updated On: January 25, 2025)

 GST Demand Order Set Aside as Assessee was Unware of Show Cause Notice due to uploaded on view additional notices and orders Tab on GST Portal

Summary in Key Points:

  • Issue: Whether a GST demand order passed without granting the assessee an opportunity for a personal hearing is valid.
  • Facts: The assessee challenged a demand order issued based on discrepancies found in their GST returns. The assessee claimed that they were unaware of the show cause notice and the subsequent order as these were uploaded on the GST portal under the “view additional notices and orders” tab. The assessee requested an opportunity to explain the discrepancies.
  • Decision: The High Court set aside the demand order and directed the authorities to treat it as a show cause notice, granting the assessee an opportunity to respond and present their case.

Decision:

The High Court ruled in favor of the assessee, setting aside the impugned demand order. The court emphasized the following:

  • Lack of Awareness: The assessee’s claim of being unaware of the notices and orders uploaded on the GST portal was considered plausible.
  • Violation of Natural Justice: The court recognized that denying the assessee an opportunity to be heard violated the principles of natural justice.
  • Opportunity to Respond: The court directed that the impugned order be treated as a show cause notice, granting the assessee a chance to respond and explain the discrepancies.
  • Fairness and Transparency: This decision ensures that the assessee is given a fair opportunity to present their case and ensures transparency in the GST proceedings.

Important Note: This case highlights the importance of ensuring effective communication and providing a fair opportunity of hearing to assessees in GST proceedings. While uploading notices and orders on the GST portal is a valid method of service, it is crucial to ensure that assessees are aware of these communications. The High Court’s decision emphasizes the need to prioritize the principles of natural justice and provide taxpayers with a reasonable chance to respond to any demands or notices issued against them.

HIGH COURT OF MADRAS
Tvl. R. Jayaramakrishnan
v.
Deputy State Tax Officer – 1
J. SATHYA NARAYANA PRASAD, J.
W.P.No.36499 of 2024
W.M.P.Nos.39344, 39345 and 39346 of 2024
DECEMBER  9, 2024
M. Desingu, for the Petitioner. T.N.C. Kaushik, Addl. Govt. Pleader (Tax) for the Respondent.
ORDER
1. Mr.T.N.C.Kaushik, learned Additional Government Pleader (Tax) takes notice on behalf of the respondents. With the consent of both parties, this writ petition is taken up for final disposal at the admission stage itself.
2. The present writ petition is filed challenging the impugned order passed by the first respondent dated 19.06.2024 relating to the assessment year 2019-20.
3. The petitioner is engaged in the business of Goods Transport Agency. The petitioner is a registered dealer under Goods and Services Act, 2017 GSTIN:33AMQPJ7931H1ZS validity from 09.07.2017. The said GSTIN was cancelled by the State Tax Officer (Circle), Perambur with effect from 20.09.2018. Upon cancellation of GSTIN:33AMQPJ7931H1ZS, the petitioner got new registration certificate in GSTIN:33AMPJ7931H2ZR with effect from 19.09.2019. The monthly returns in Form GSTR-1 and Form GSTR-3B were furnished by the petitioner electronically through common portal.
4. Learned counsel appearing for the petitioner submitted that a show cause notice was served upon the petitioner in Form GST DRC-01 dated 22.08.2023 by the first respondent. Further, personal hearing was offered on 22.09.2023. However, the petitioner had neither filed its reply nor availed the opportunity for a personal hearing. Hence, the impugned order came to be passed.
5. It is submitted by the learned counsel for the petitioner that neither the show cause notices nor the impugned order of assessment has been served on the petitioner by tender or sending it by RPAD, instead it had been uploaded under the field “Additional Notices and Orders” tab on the GST Portal, thereby, the petitioner was unaware of the initiated proceedings and was thus unable to participate in the adjudication proceedings. It is further submitted by the learned counsel for the petitioner that if the petitioner is provided with an opportunity, they would be able to explain the alleged discrepancies that there have been significant differences in the comparison of taxable suppliers reported by the petitioner through GSTR-3B monthly returns to compare with Form 26AS – Annual statement under section 203AA of the income tax Act, 1961 for the financial year 2019-2020. The first respondent arrived at a net difference of turnover for the year 20192020 of Rs.77,10,000/- and imposed taxes of Rs.6,93,900/- under CGST and Rs.6,93,900/- under SGST besides interest and penalty are imposed thereon.
6. The learned counsel for the petitioner would place reliance upon the recent judgment of this Court in the case of M/s.K.Balakrishnan, Balu Cables v. O/o. the Assistant Commissioner of GST & Central Excise in W.P.(MD)No.11924 of 2024 dated 10.06.2024, to submit that this Court has remanded the matter back in similar circumstances subject to payment of 25% of the disputed taxes.
7. It was further submitted that the petitioner is ready and willing to pay 25% of the disputed tax and that they may be granted one final opportunity before the adjudicating authority to put forth their objections to the proposal, to which the learned Additional Government Pleader appearing for the respondents does not have any serious objection.
8. In view thereof, the impugned order passed by the first respondent dated 19.06.2024 is hereby set aside and this Court is inclined to pass the following orders:
(a)The petitioner shall deposit 25% of the disputed tax within a period of two weeks from the date of receipt of a copy of this order.
(b)On complying with the above condition, the impugned order of assessment shall be treated as show cause notice and the petitioner shall submit its objections within a period of four weeks from the date of receipt of a copy of this order along with supporting documents/material.
(c)If any such objections are filed, the same shall be considered by the respondents and orders shall be passed in accordance with law after affording a reasonable opportunity of hearing to the petitioner.
(d)If the above deposit is not paid or objections are not filed within the stipulated period, i.e., two weeks and four weeks respectively from the date of receipt of a copy of this order, the impugned order of assessment shall stand revived.
Accordingly, the Writ Petition stands disposed of with the above observations and directions. There shall be no order as to costs. Consequently, connected miscellaneous petitions are closed.
Category: GST

About CA Satbir Singh

Chartered Accountant having 12+ years of Experience in Taxation , Finance and GST related matters and can be reached at Email : Taxheal@gmail.com