The bench observed that the interest of justice warranted providing the petitioner with an opportunity to contest the tax demand on its merits

The Madras High Court set aside the Goods and Services Tax ( GST ) demand order and directed a reconsideration on a mismatch between the GSTR-3B return and the auto-populated GSTR-2A. In the writ petition, the petitioner assailed both the original assessment order and the order rejecting the rectification petition. It was noted that pursuant to the show cause notice dated 26.08.2022, the assessment order dated 22.06.2023 was issued. The petitioner asserted that he was unaware of the proceedings because the show cause notice and the order were uploaded in the “View Additional Notices and Orders” tab on the GST portal and were not communicated to the petitioner through any other mode. Despite rectifying the alleged mismatch by filing GSTR-9 and GSTR-9C returns, the rectification petition was rejected. C. Rekhakumari, counsel for the petitioner, submitted that the petitioner uploaded the annual return and reconciliation statement before the impugned assessment order was issued and thereby resolved the issue arising out of the mismatch between the GSTR-3B and the auto-populated GSTR-2A. It was also noted that the entire tax demand, interest, and penalty of Rs.3,54,558/- were appropriated from the petitioner’s bank account in March 2024. The bench of Justice Senthilkumar Ramamoorthy found that the tax proposal was based on a mismatch between the GSTR-3B return and the auto-populated GSTR-2A. The petitioner had placed on record the annual return in Form GSTR-9 and the reconciliation statement in Form GSTR-9C. The documents disclosed that the entire liability towards tax, interest, and penalty had already been appropriated from the petitioner’s bank account. In these circumstances, the court deemed it just to provide the petitioner an opportunity to contest the tax demand on merits. Consequently, the court set aside the impugned assessment order, and remanded the matter for reconsideration. The petitioner was permitted to submit a reply to the show cause notice within two weeks from the date of receipt of a copy of the order. The respondent was directed to provide a reasonable opportunity to the petitioner, including a personal hearing, and to issue a fresh assessment order within three months from the date of receipt of the petitioner’s reply. The court clarified that the sum of Rs.3,54,558/-, which had been appropriated from the petitioner’s bank account, would abide by the outcome of the remanded proceedings. The writ petition was disposed of on these terms, with no order as to costs.