GST liability confirmed on Purchase and Sales Turnover Mismatch: Madras HC allows Hearing Opportunity on 10% Pre-Deposit

The tax proposal pertains to a mismatch between the purchase turnover and sales turnover

The Madras High Court has granted a hearing opportunity for cases where GST liability was confirmed due to mismatches in purchase and sales turnover, with a requirement of a 10% pre-deposit. An order originally dated 23.12.2023 was challenged on the ground of breach of principles of natural justice. The petitioner asserts that he was unaware of proceedings culminating in the impugned order because the show cause notice and order were uploaded on the GST portal but not communicated to the petitioner through any other mode. Mr.V.Balamurugan representing the petitioner submitted that the tax proposal pertains to a mismatch between the purchase turnover and sales turnover. On instructions, he submits that the petitioner agrees to remit 10% of the disputed tax demand as a condition for remand. Mr.C.Harsha Raj, Additional Government Pleader, accepted notice for the respondent. He pointed out that the impugned order was preceded by an intimation dated 05.10.2023 and show cause notice dated 23.11.2023. Consequently, he submits that principles of natural justice were complied with. It was evident that the tax proposal was confirmed on the ground that the petitioner did not file a written objection or attend the personal hearing. By taking into account the assertion that the petitioner could not participate in proceedings on account of being unaware of the same, the interest of justice warrants that the petitioner be provided an opportunity by putting the petitioner on terms. The Coram of Justice Senthil Kumar Ramamoorthi observed that impugned order dated 23.12.2023 was set aside subject to the condition that the petitioner remits 10% of the disputed tax demand as agreed to within a period of 15 days from the date of receipt of a copy of this order. The petitioner was permitted to submit a reply to the show cause notice within the aforesaid period. Upon receipt of the petitioner’s reply and upon being satisfied that 10% of the disputed tax demand was received, the respondent was directed to provide a reasonable opportunity to the petitioner, including a personal hearing, and thereafter issue a fresh order within a period of three months from the date of receipt of the petitioner’s reply. The writ petition was disposed of, Consequently, connected miscellaneous petitions were closed.

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