Given that a major portion of the tax had already been recovered, the court refrained from imposing any further terms. As a result, the court set aside the order and remanded the matter for reconsideration

The Madras High Court has set aside a demand order after discovering that 41% of the disputed GST ( Goods and Services Tax) amount was recovered and issued a demand order without granting the petitioner an opportunity for a hearing. The petitioner, Sri GK Industries filed a writ petition challenging the order and the summary of the order in DRC-07 dated 26.04.2024. According to the petitioner’s counsel, a show cause notice was issued by the respondent on 27.12.2023 through the common GST portal under “View Additional Notices/Orders.” A reminder notice followed on 22.04.2024, and the petitioner submitted a reply in FORM GST DRC-06 on the same day. However, the respondent passed the demand order on 26.04.2024 without considering this reply, allegedly violating Section 75(4) of the GST Act. Get a Copy of GST Manual (Acts & Rules), Click here The high court heard submissions from both parties. It found that the order inaccurately stated the petitioner did not respond or provide documentary evidence, when in fact, the petitioner had submitted a reply on 22.04.2024, days before the impugned order was passed. The court ruled that failing to consider the petitioner’s reply and denying a personal hearing violated the principles of natural justice, which mandate that parties must be given a fair and reasonable opportunity to present their case. Additionally, Justice Krishnan Ramasamy noted that 41% of the demanded tax amount was recovered from the petitioner on 25.07.2024, after the impugned order had been issued. Given that a major portion of the tax had already been recovered, the court refrained from imposing any further terms. As a result, the court set aside the order and remanded the matter for reconsideration. Get a Copy of GST Manual (Acts & Rules), Click here The petitioner was directed to submit a fresh reply or objection, along with any necessary documents, within two weeks of receiving the court’s order. The GST department was instructed to issue a 14-day notice for a personal hearing and to pass appropriate orders on merits, as quickly as possible. With these directions, the writ petition was disposed of.