Stem Infrastructure Vs Assistant Commissioner (ST)
Date: June 7, 2024
Subject Matter
Opportunity to contest SCN shouldn’t be denied due to failure of Accountant to inform the taxpayer about the proceedings
Summary
The petitioner challenged an order dated December 18, 2023, claiming a lack of awareness regarding the proceedings that led to this order. The petitioner had employed an accountant for GST compliance, who failed to inform him about significant communications and proceedings. The petitioner’s counsel pointed out that a request for an adjournment was submitted on November 22, 2023, which was ignored prior to the issuance of the impugned order. The Government Advocate, representing the respondent, acknowledged that the order followed an earlier intimation and show cause notice sent on September 15 and September 23, 2023, respectively, along with two reminders. It was noted that the tax demand arose from a mismatch between the petitioner’s GSTR 3B returns and the auto-populated GSTR 2A. The tax proposal was confirmed despite the petitioner’s failure to respond to the show cause notice and personal hearing notices. Thus, the court found it just to provide the petitioner an opportunity to contest the tax demand. Consequently, the court set aside the order of December 18, 2023, on the condition that the petitioner remits 10% of the disputed tax demand within two weeks and submit a reply to the show cause notice. The court mandated that after receiving the reply and confirming the payment condition, the respondent must grant a reasonable opportunity for a personal hearing and issue a fresh assessment order within three months. The petition was disposed of accordingly.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
An order dated 18.12.2023 is assailed on the ground that the petitioner was unaware of proceedings culminating in the impugned order because the petitioner had engaged the services of an Accountant to handle GST compliances and such Accountant did not inform the petitioner about these proceedings.
2. Learned counsel for the petitioner submits that a request for an adjournment was made by communication dated 22.11.2023, but such communication was disregarded while issuing the impugned order. On instructions, learned counsel submits that the petitioner agrees to remit 10% of the disputed tax demand as a condition for remand.
3. Mr. V. Prasanth Kiran, learned Government Advocate, accepts notice for the respondent. He points out that the impugned order was preceded by an intimation dated 15.09.2023, a show cause notice dated 23.09.2023 and two reminders. He also submits that he has no instructions with regard to the communication dated 22.11.2023.
4. On perusal of the impugned order, it is evident that the tax proposal pertains to the mismatch between the GSTR 3B returns of the petitioner and the auto populated GSTR 2A. It is also evident that the tax proposal was confirmed because the petitioner did not reply to the show cause notice and the personal hearing notices. In effect, the tax proposal was confirmed without considering the objections of the petitioner. In these circumstances, albeit by putting the petitioner on terms, it is just and necessary to provide the petitioner an opportunity to contest the tax demand on merits.
5. For reasons set out above, the impugned order dated 18.12.2023 is set aside subject to the condition that the petitioner remits 10% of the disputed tax demand as agreed to within a maximum period of two weeks from the date of receipt of a copy of this order. Within the aforementioned period, the petitioner is also permitted to submit a reply to the show cause notice. Upon receipt thereof and upon being satisfied that 10% of the disputed tax demand was received, the respondent is directed to provide a reasonable opportunity to the petitioner, including a personal hearing, and thereafter issue a fresh assessment order within a period of three months from the date of receipt of the petitioner’s reply.
6. W.P.No.12406 of 2024 is disposed of on the above terms. No costs. Consequently, W.M.P.Nos.13534 and 13535 of 2024 are closed.