Madras HC sets aside Assessment Orders u/s 63 of GST Act due to Lack of Opportunity for Contesting Tax Proposal [Read Order]

The court directed the respondent to offer the petitioner a reasonable opportunity, including a personal hearing, before issuing fresh orderss

The Madras High Court has set aside assessment orders issued under Section 63 of the Goods and Services Tax ( GST ) Act, 2017, and the matters were remanded for reconsideration. The writ petitions challenged the orders passed by the Deputy State Tax Officer and the Deputy Commercial Tax Officer of Mettur Circle. Annalakshmi Stores, the petitioner, contested the tax assessments for 2017-18, 2018-19, 2019-20, and 2020-21. The GST registration of the petitioner was cancelled on February 8, 2019, with retrospective effect from August 31, 2017, due to continuous non-filing of returns for six months. The petitioner claimed unawareness of the notice issued in Form GST ASMT-14 due to it being uploaded via a temporary ID. The petitioner, represented by G. Vardini Karthik, argued that issuing the show cause notice in Form GST ASMT-14 is mandatory as per Section 63 of the applicable GST enactments and Rule 100 of the TNGST Rules. The counsel contended that uploading the notice on a temporary ID did not constitute proper service under Section 169 of the applicable GST enactments. The petitioner also noted that they had remitted 10% of the disputed tax demand but could not file statutory appeals due to the temporary ID issue. Harsha Raj, the Additional Government Pleader, asserted that the petitioner’s original email ID and mobile number were used to create the temporary ID, and the relevant password was communicated to these contact points. Thus, the petitioner had access to the temporary ID and the notices. Justice Senthilkumar Ramamoorthy noted that the tax liability was computed on a best judgement basis using auto-populated GSTR-2A data without hearing the petitioner in person. The court acknowledged the necessity for the petitioner to contest the tax proposal on merit. The Madras High Court ordered that the impugned assessment orders be set aside, provided the petitioner remits 10% of the disputed tax demand for each assessment period within two weeks. The petitioner was permitted to apply for a refund of previously remitted amounts under the old registration, to be processed within 30 days. The court directed the first respondent to offer the petitioner a reasonable opportunity, including a personal hearing, before issuing fresh orders within three months from the receipt of the petitioner’s reply. The writ petitions were disposed of without cost, and the connected miscellaneous petitions were closed.

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