Malaysia Metals Vs Assistant Commissioner (ST) (FAC)
Date: April 2, 2024
Subject Matter
Taxpayer unaware of proceedings initiated by issuing notice in Form GST ASMT 10 and show cause notice in Form GST DRC-01: Matter remanded for reconsideration on payment of 10% of disputed tax
Summary
The case law pertains to the Madras High Court's judgment in the case of Malaysia Metals vs Assistant Commissioner (ST) (FAC). The petitioner, engaged in wholesale and retail trading, challenged a tax demand, claiming lack of prior opportunity to contest the demand. The petitioner argued that they were unaware of the proceedings initiated through notices in Forms GST ASMT 10 and DRC-01 and were not afforded a reasonable opportunity to contest the tax demand. The court, considering the lack of prior hearing, set aside the impugned order and remanded the matter for reconsideration, with the condition that the petitioner remits 10% of the disputed tax demand and is granted the opportunity to reply to the show cause notice within 15 days.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
An order dated 28.08.2023 is assailed on the ground that the petitioner did not have a reasonable opportunity to contest the tax demand.
2. The petitioner is engaged in the business of wholesale and retail trading of unroasted iron pyrites, pig iron and related products. The petitioner asserts that she was unaware of proceedings initiated by issuing notice in Form GST ASMT 10 and show cause notice in Form GST DRC-01. It is further stated that the petitioner became aware of such proceedings only upon receipt of bank attachment notice dated 30.01.2024.
3. Learned counsel for the petitioner submits that the petitioner was entitled to file the annual return for the assessment period 2022-2023 on or before 31.12.2023. Even without waiting for the lapse of such date, it is submitted that the impugned order was issued.
4. Mr. T.N.C.Kaushik, learned Additional Government Pleader, accepts notice for the 1st respondent. He submits that the impugned order discloses that multiple opportunities were provided to the petitioner.
5. The admitted position is that the petitioner was not heard before the impugned order was issued. It is also clear that this situation was a consequence of the petitioner’s failure to respond to the notice in Form ASMT 10 and the show cause notice.
6. On instructions, learned counsel for the petitioner submits that the petitioner is willing to remit 10% of the disputed tax demand as a condition for remand.
7. In view of the fact that the petitioner was not heard before the impugned order was issued, the order calls for interference by putting the petitioner on terms.
8. Therefore, the impugned order dated 28.08.2023 is set aside and the matter is remanded for reconsideration 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 is also 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 1st respondent is directed to provide a reasonable opportunity to the petitioner, including a personal hearing, and thereafter issue a fresh order within a period of two months from the date of receipt of the petitioner’s reply. As a corollary of the impugned order being set aside, the bank attachment is raised. If any amounts were appropriated from such bank account before the order was issued, such amounts shall be retained subject to the outcome of the remanded proceedings.
9. The writ petition is disposed of on the above terms. There will be no order as to costs. Consequently, connected miscellaneous petitions are closed