Madras HC ordered to deposit 25% of the disputed tax while giving another chance to be heard

TVl. Sornam Medicals vs Commercial Tax Commissioner (Madras High Court)

The Madras High Court held that the order was passed on the basis of non-response to the notice and notice of hearing by the petitioner. Accordingly, the order was quashed directing the petitioner to deposit 25% of the disputed tax and directing the department to give another chance.

Facts- With this petition, the applicant has challenged the contested decision of the 2^i.e respondent for the assessment year 2017-18, dated 31.12.2023. In particular, the petitioner failed to respond to the notices sent to the petitioner, both in DRC 01A dated 23 September 2023 and in DRC 01 dated 29 September 2023. The petitioner also failed to take advantage of the personal notice of hearing dated 9.11.2023.

It is disputed that the department arrived at a difference in turnover on the basis of the information generated in GSTR-2A without realizing that the petitioner did not avail input tax credit after the petitioner had opted to pay tax u/s. 10 of the respective GST Act. Apart from this, it is submitted that the petitioner has also not availed the input tax credit from October 2017 and therefore the petitioner has been wrongly demanded.

Conclusion- It is held that the petitioner can be given an opportunity to air his complaint before the respondents subject to conditions. Therefore, petitioner shall deposit 25% disputed tax confirmed by the disputed order of Electronic Cash Ledger within a period of thirty (30) days from the date of receipt of a copy of this order. The contested decision, dated 31.12.2023, adopted by the 2^i.e defendant is quashed and the case is remanded to the 2^i.e defendant to issue a new order on the merits. The impugned order which remains quashed shall be treated as an addendum to the Show Cause Notice in DRC 01A dated 23.09.2023 and in DRC 01 dated 29.09.2023.

FULL TEXT OF THE JUDGMENT/ORDER OF THE HIGH COURT OF MADRAS

With this petition, the applicant has challenged the contested decision of the 2^i.e respondent for the assessment year 2017-18, dated 31.12.2023.

2. The petitioner has not responded to the notices issued to the petitioner both in DRC 01A dated 23 September 2023 and in DRC 01 dated 29 September 2023. The petitioner has also not availed of the personal notice of hearing dated 9.11.2023.

3. The applicant’s counsel argues that the applicant also failed to respond to the summons. It is clear that the impugned order has been issued without providing three chances as contemplated under Section 75(5) of the relevant GST Act. Apart from this, counsel for the petitioner has submitted that the petitioner has been filing returns regularly up to the month of November 2017. Thereafter, the petitioner opted for a composite scheme under Section 10 of the relevant GST Act.

4. It is submitted that on the basis of the information generated in GSTR-2A, the department has arrived at a difference in turnover without realizing that the petitioner did not avail the input tax credit after the petitioner had opted to pay tax under Section 10 of the relevant legislation. GST law. Apart from this, it is submitted that the petitioner has also not availed the input tax credit from October 2017 and therefore the petitioner has been wrongly demanded. So he prayed for one opportunity to explain the matter again. It is submitted that the petitioner is likely to succeed if given the opportunity. Counsel for the petitioner submits that the petitioner can be subjected to any reasonable period to safeguard the interest of the revenue.

5. The aforesaid contention is contradicted by the learned Government counsel for the respondent on the ground that the petition is hopelessly barred and therefore liable to be dismissed on account of bars, in the light of the decision of the Hon’. Supreme Court in the case of Assistant Consumer Healthcare Limited reported inside 2020 SCC Online SC 440.

6. It is submitted that the remedy in appeal is also barred in terms of limitation under Section 107 of the respective GST Acts as held by the Hon’ble Supreme Court in the case of Singh Enterprises Vs. Commissioner of Central Excise, Jamshedpur and others reported inside (2008) 3 SCC 70 and submitted that this petition is liable to be dismissed.

7. After considering the arguments advanced by the learned counsel for the petitioner and the learned Additional Government Pleader for the respondents, the petitioner may be given an opportunity to air his grievance before the respondents on conditions. Therefore, petitioner shall deposit 25% disputed tax confirmed by the disputed order of Electronic Cash Ledger within a period of thirty (30) days from the date of receipt of a copy of this order. The contested decision, dated 31.12.2023, adopted by the 2^i.e defendant is quashed and the case is remanded to the 2^i.e defendant to issue a new order on the merits. The impugned order which remains quashed shall be treated as an addendum to the Show Cause Notice in DRC 01A dated 23.09.2023 and in DRC 01 dated 29.09.2023.

8. The petitioner shall submit a consolidated response within 30 days from the date of receipt of a copy of this decision. The respondent shall thereafter proceed as soon as possible to issue a final order on the merits and in accordance with law, preferably within a period of two (2) months from the date of the response to be submitted by the petitioner. submitted. It is made clear that in case the petitioner fails to file an answer or deposit the amount as stated above, the respondents are at liberty to proceed against the petitioner as if this writ petition had been dismissed today. in limine. Needless to say, the petitioner will be heard before the final order is passed.

9. In view of the foregoing, this petition is well-founded. No fees. Consequently, the affiliated Miscellaneous petition is closed.