Tax Demand Dispute: Petitioner Granted Opportunity by Madras High Court
The Hon’ble High Court of Madras directed that the petitioner must be provided an opportunity to contest the tax demand dispute on merits. Accordingly, the impugned order was set aside, and the matter was remanded for reconsideration.
Case Background and Context
In the case of Tvl. Rana Granites v. Assistant Commissioner (ST) Senthil Kumar Ramamoorthy, J.W.P. No. 12980 of 2024 W.M.P. Nos. 14139 & 14141 of 2024 (June 10, 2024), the petitioner challenged an order claiming they were not given a reasonable opportunity to contest the GST tax dispute on merits.
The petitioner became aware of the proceedings only in March 2024 when garnishee proceedings were initiated. This delay occurred because the notice and impugned order dated 05.12.2023 were uploaded solely in the “View Additional Notices and Orders” tab on the GST portal and were not communicated by any other mode.
Key Issues in the GST Tax Dispute
The petitioner’s counsel submitted that the confirmed tax proposal resulted from a mismatch between GSTR-3B and auto-populated GSTR-2A. If given an opportunity, the petitioner could demonstrate that only eligible ITC was claimed. To facilitate remand, the petitioner agreed to remit 10% of the disputed tax demand. The confirmed tax proposal was triggered due to nonresponse to the tax show cause notice.
Court Directions for Contest Tax Demand and Remand
The High Court held that the impugned order dated 05.12.2023 is set aside, and the matter is remanded for reconsideration. This is subject to the condition that the petitioner remits 10% of the disputed tax demand within two weeks of receiving a copy of the order.
During this period, the petitioner may submit a detailed tax show cause notice reply, including all relevant documents. Upon receipt and verification of the 10% remittance, the respondent is directed to provide a reasonable opportunity, including a personal hearing, and issue a fresh order within three months from the date of receiving the petitioner’s reply.
Consequences of Tax Assessment Remand and Show Cause Notice
As a result of the tax assessment remand, the impugned GST order is set aside. Correspondingly, all garnishee proceedings against the petitioner are also set aside.
Filing Tax Show Cause Notice Reply
The petitioner now has a clear opportunity to contest tax demand fully by submitting a comprehensive reply to the show cause notice along with supporting documents, ensuring fair reconsideration under the Madras High Court tax ruling.