GST Vidhi | GST Case Law

Case Details: Mohanasundaram Senthilvelu, Proprietor of Tamilnaddu Machine Works  Vs. The State Tax Officer, Mettur Assessment Circle

Court: High Court of Judicature at Madras

Case No: W.P. No. 26269 of 2024

Date of Order: 05.09.2024

Judge: Hon'ble Mr. Justice Krishnan Ramasamy

Case Summary: The petitioner sought a writ of Certiorarified Mandamus challenging an order passed by the State Tax Officer under the CGST Act, 2017, which resulted in a bank attachment notice. The petition challenges the proceedings initiated for the financial year 2018-19 on the basis of excess Input Tax Credit (ITC) of ₹4,82,703/- under SGST and CGST. The petitioner alleged that the order was issued without following the principles of natural justice, as no opportunity for a personal hearing was given. The petitioner also sought the lifting of the bank attachment order.

Facts of the Case:

·        A Show Cause Notice (SCN) dated 22.12.2021 was issued for the year 2018-19, questioning the excess ITC claimed by the petitioner.

·        A Demand Notice followed on 28.02.2022 and a reminder notice in November 2023.

·        Despite an order generated by the system dropping the proceedings on 28.04.2024, a new GST ASMT-12 form was issued on 15.08.2024, even after the petitioner responded to the notices.

·        The petitioner claimed that the mismatch in ITC arose from the supplier's delayed monthly returns, and that the notices were incorrectly uploaded, leading to a delayed response.

·        The petitioner argued that no opportunity was provided for a hearing or to submit objections, violating natural justice principles.

Petitioner's Submission:

·        The petitioner submitted that the notices were uploaded in the wrong section of the GST portal and were not visible to the petitioner or their tax consultant.

·        The mismatch in ITC was attributed to the supplier's delayed filing of returns under B2C instead of B2B.

·        The petitioner was willing to pay 10% of the demand and requested an opportunity to file objections and produce relevant documents.

Respondents' Submission:

·        The Additional Government Pleader (Taxes) submitted that the notice for a personal hearing was uploaded in the GST online portal, but the petitioner did not avail of the opportunity.

·        The government pleader had no objection to remanding the matter for reconsideration, subject to the petitioner's compliance with certain conditions.

Findings of the Court:

·        The court noted that the impugned orders were passed without giving the petitioner a proper hearing, thus violating the principles of natural justice.

·        Considering the submissions from both sides, the court found it appropriate to set aside the orders and remand the case for fresh consideration, conditional upon the petitioner's compliance with certain terms.

Judgment:

·        The impugned orders are set aside.

·        The case is remanded to the first respondent for fresh consideration, on the condition that the petitioner pays 10% of the demand within four weeks.

·        Upon payment, the bank attachment on the petitioner's account will be lifted immediately.

·        The petitioner must file a reply/objection within two weeks, supported by relevant documents.

·        The respondent must give 14 days' notice for a personal hearing and pass an order on the merits as soon as possible.

Conclusion: The court concluded that the principles of natural justice had been violated, as the petitioner was not given a fair opportunity to present their case. The court provided the petitioner with the opportunity to file objections and directed the respondents to reconsider the matter with proper adherence to procedural fairness.

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