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Court
Sets Aside GST Demand Order Due to Lack of Physical Service of Notice and
Remands Case for Fresh Hearing
Summary Details: Candour Auto Components Vs. Deputy Commercial Tax
Officer/Deputy State Tax Officer-2, Kundrathur Assessment Circle.
Case Number: W.P.No.21772
of 2024.
Date of Order: August
8, 2024.
Name of Court: High
Court of Judicature at Madras.
Presiding
Judge: The Honourable Mr. Justice Krishnan Ramasamy.
Summary of Case: The
petitioner, Candour Auto Components, filed a writ petition seeking the quashing
of an impugned order under Section 73 of the Tamil Nadu Goods and Service Tax
(TNGST) Act, 2017, and the Central Goods and Services Tax (CGST) Act, 2017. The
order demanded payment of excess Input Tax Credit (ITC) and associated
penalties for the financial year 2017-18. The petitioner contends that the
order was not properly served, as it was only uploaded to the GST portal,
depriving them of the opportunity to defend their case.
Facts of the Case:
·
The petitioner was issued a show cause
notice on December 12, 2023, under Section 73 of the TNGST/CGST Act.
·
The demand was raised for INR 33,97,729,
including interest and penalties, due to excess ITC claimed by the petitioner
in FY 2017-18.
·
The petitioner claims that they were not
informed of the notice, as it was only uploaded on the GST portal and not
physically served. As a result, they did not file a reply.
·
The petitioner argued that their inability
to respond was due to not being aware of the notice and requested the court to
set aside the impugned order for reconsideration.
Submissions by Petitioner:
·
The petitioner’s counsel, Mr. N.V. Balaji,
argued that the notice and impugned order were not physically served but only
uploaded on the GST portal.
·
Due to this lack of communication, the
petitioner could not defend themselves.
·
The petitioner expressed willingness to
deposit 10% of the disputed tax demand to have the case reconsidered.
Submissions by Respondent:
· The
respondent's counsel, Mr. G. Nanmaran (Special Government Pleader for Tax),
acknowledged that the notice was uploaded to the portal but argued that the
petitioner failed to appear for a personal hearing despite the notice.
·
The respondent, however, agreed to comply
with any order passed by the court.
Findings and Judgment of
the Court:
· The
court observed that the notice was uploaded to the GST portal but not
physically served on the petitioner, which appears to have deprived the
petitioner of an opportunity to respond.
· The
court emphasized that no order should be passed without giving sufficient
opportunity to the petitioner.
·
It found the petitioner’s claim of being
unaware of the uploaded notice genuine.
·
The impugned order dated December 12,
2023, was set aside.
Conclusion: The
court remanded the matter back to the respondent for reconsideration on the
condition that the petitioner deposits 10% of the disputed tax demand within
four weeks of receiving the court's order. The petitioner was also directed to
file a reply within two weeks after depositing the amount. The respondents were
instructed to fix a date for a personal hearing after sending a physical notice
to the petitioner and to pass an order based on merits and in accordance with
the law.
Disclaimer: All the Information is based on the notification, circular and order issued by the Govt. authority and judgement delivered by the court or the authority information is strictly for educational purposes and on the basis of our best understanding of laws & not binding on anyone.
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