Top Stories Demand Notice on GSTR Mismatch issued after 5 Years GST Registration Cancelled: Madras HC sets aside Order on 5% Pre-deposit [Read Order] The petitioner submitted that they had not monitored the portal after the cancellation of the registration and thus missed the chance to engage in the proceedings By Navasree A.M – On October 31, 2024 3:44 pm – 2 mins read In a recent ruling, the Madras High Court set aside a GST notice and demand order issued after 5 years of cancellation of GST ( Goods and Services Tax ) registration on mismatch in GST Returns. The petitioner challenged an order dated December 20, 2023, claiming that they were denied a reasonable opportunity to contest the tax demand.

The petitioner’s GST registration was cancelled by an order dated September 25, 2018, effective from August 31, 2018. Despite the cancellation, a show cause notice was uploaded on the common GST portal on September 29, 2023, nearly five years later. Complete Supreme Court Judgment on GST from 2017 to 2024 with Free E-Book Access, Click here As a result, the petitioner argued that they had not monitored the portal and thus missed the chance to engage in the proceedings. The petitioner’s counsel emphasised the existence of an unutilized input tax credit balance of ₹5,09,847 in the petitioner’s electronic credit ledger under the Integrated GST (IGST) head, arguing that this credit, if considered, would have eliminated any discrepancies between the petitioner’s GSTR-3B returns and the auto-populated GSTR-2A. Further submitted that this credit had lapsed but suggested that the petitioner would be willing to remit 5% of the disputed tax demand as a precondition for a remand, thereby facilitating a fair reconsideration of the case. Complete Supreme Court Judgment on GST from 2017 to 2024 with Free E-Book Access, Click here

Representing the government, counsel Mr. V. Prashanth Kiran argued that the petitioner should have continued to monitor the GST portal for any notices related to the period when their business was active, despite the GST registration cancellation. He also maintained that the proceedings complied with the principles of natural justice, asserting that the petitioner’s absence during the personal hearing was due to their own negligence. The court observed that the cancellation order from 2018, which took effect retrospectively from August 31 of that year, supported the petitioner’s claim of an unavailable credit. The electronic credit ledger provided by the petitioner reflected unutilized amounts of ₹5,09,847 under IGST and ₹30,377 each under Central GST (CGST) and State GST (SGST).

Based on these circumstances, the court deemed it necessary to reassess the petitioner’s case. Complete Supreme Court Judgment on GST from 2017 to 2024 with Free E-Book Access, Click here Thus, Justice Senthilkumar Ramamoorthy set aside the order dated December 20, 2023, on the condition that the petitioner deposits 5% of the disputed tax demand within fifteen days of receiving the court’s order, instructed the department to issue fresh order after the response of petitioner to the SCN and giving personal hearing. To Read the full text of the Order