The high court directed the respondent to provide a reasonable opportunity including a personal hearing, and to issue a fresh order within three months of receiving the petitioner’s reply and pre-deposit
The Madras High Court has set aside a GST demand order and ordered a personal hearing, on 10% pre-deposit requirement, after noting that a turnover mismatch between Form 26AS and GST Returns was due to a few periods (April 1, 2017 to June 30, 2017) falling within the pre-GST period. In the writ petition, the petitioner, Haarine Associates, has challenged an original order dated 28.12.2023 is being challenged on the grounds of breach of principles of natural justice and non-application of mind. The petitioner had filed returns under the applicable GST enactments for the assessment period 2017-2018. Following a show cause notice issued on 07.08.2023, the impugned order was subsequently issued on 28.12.2023. The petitioner’s counsel submitted that the GST enactments came into force on 01.07.2017. Thus, the petitioner’s GSTR 1 statement, GSTR 3B return, and the annual return reflected the turnover from 01.07.2017 to 31.03.2018. The period from 01.04.2017 to 30.06.2017, being pre-GST, would naturally result in a mismatch between Form 26AS and the petitioner’s GST returns. The counsel contended that tax liability was imposed solely based on this mismatch. Without prejudice to this contention, the petitioner agreed to remit 10% of the disputed tax demand as a condition for remand. The counsel representing the respondent contended that principles of natural justice were followed to by issuing a notice in Form ASMT 10 dated 05.07.2023, a show cause notice dated 07.08.2023, and a personal hearing notice dated 15.09.2023. The bench of Justice Senthilkumar Ramamoorthy, examining the impugned order stated that GST liability was imposed due to the difference between the turnover reflected in Form 26 AS and the turnover in the petitioner’s GST returns. The petitioner’s counsel explained that this difference arose because the period from 01.04.2017 to 30.06.2017 did not fall within the GST period. Since the impugned order was issued without addressing this aspect and without a hearing, a reconsideration is necessary, provided the petitioner remits 10% of the disputed tax demand, observed the court. Thus, the impugned GST order was set aside on the condition that the petitioner remits 10% of the disputed tax demand within two weeks from receiving a copy of this order. The petitioner was allowed to submit a reply to the show cause notice within this period. The high court directed the respondent to provide a reasonable opportunity including a personal hearing, and to issue a fresh order within three months of receiving the petitioner’s reply and pre-deposit. As the assessment order is set aside, the bank attachment was also lifted.