Hind Aluminium Company Vs State Tax Officer
Date: October 23, 2025
Subject Matter
Re-adjudication Ordered for GST Demand on E-way Bill-GSTR-1 Mismatch Due to No Personal Hearing
Summary
The Writ Petition is allowed by way of remittance. The Madras High Court set aside the impugned order to the extent it confirmed the demand for Defect No.3, primarily due to the respondent's failure to provide the petitioner with a personal hearing, despite a prima facie case of computational errors. The case is remitted back for re-adjudication, subject to a pre-deposit.
Summary of Facts and Dispute:
- Impugned Action: The impugned order dated 19.02.2025 confirmed a demand of Rs. 7767538 (including CGST, SGST, interest, and penalty) for the year 2019-20, related to Defect No.3, which pertained to discrepancies between E-way bill verification and GSTR-1 details.
- Petitioner's Argument: The petitioner argued that there were computational errors in the figures used to confirm the demand for Defect No.3 and that they were not afforded an opportunity for a personal hearing to explain their case, despite submitting a reply to the Show Cause Notice.
- Core Question of Law: Whether the impugned order, confirming a tax demand based on E-way bill and GSTR-1 mismatches (Defect No.3), is sustainable when passed without granting the petitioner a personal hearing, especially in the presence of alleged computational errors.
Key Legal Issues & Findings:
Procedural Fairness and Opportunity of Hearing
The Court emphasized the importance of procedural fairness and the right to be heard.
- Lack of Personal Hearing: The petitioner, despite submitting a reply to the Show Cause Notice in Form DRC-01 dated 19.08.2024, through a reply dated 01.10.2024, was not afforded an opportunity to explain their case in person before the impugned order was passed.
- Prima Facie Case: The Court found that the petitioner had made out a prima facie case regarding the computational errors in the figures adopted for confirming the demand with respect to Defect No.3.
Ruling:
- Outcome: The Writ Petition is disposed of, and the case is remitted back to the respondent for re-adjudication specifically regarding Defect No.3.
- Directions: The petitioner shall deposit 10% of the disputed tax (related to Defect No.3 in the impugned order dated 19.02.2025) within four weeks. Upon compliance, the respondent shall fix a date for a personal hearing, and the petitioner may also provide supplementary written submissions. A final order on merits and in accordance with law must be passed within three months.
- Liberty: If the petitioner fails to comply with the stipulation of the 10% pre-deposit, the respondent is at liberty to proceed against the petitioner to recover the tax as if the Writ Petition was dismissed in limine.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
This Writ Petition is disposed of at the time of admission with the consent of the learned counsel for the Petitioner and the learned Special Government Pleader, who takes notice on behalf of the Respondents.
2. Heard the learned counsel appearing for the petitioner and learned Special Government Pleader appearing for the respondents.
3. In this Writ Petition, the Petitioner has challenged the impugned order dated 19.02.2025, insofar as it confirms the demand relating to Defect No.3, which pertains to E-way bill verification when compared to GSTR-1. The petitioner has made out a prima facie on merits, indicating that there are computational errors in the figures adopted for confirming the demand with respect to Defect No.3, and also a drop in the demand that was proposed for Defect No.4.
4. The petitioner had submitted a reply to the Show Cause Notice in Form DRC-01 dated 19.08.2024, through a reply dated 01.10.2024. However, the petitioner was not afforded an opportunity to explain the case in person. Though the petitioner had given a further reply, he failed to appear in person to explain the case. Consequently, the impugned order has been passed with respect to Defect No.3.
5. The relevant observation of the respondent reads as follows:-
“Proper Officer Observation:-
The Tax payer has submitted reply, the filed by the taxable person has been examined carefully as per provision of the TN GST Act-2017. The taxable person has not produce documentary evidence for difference between E-way bill and GSTR-1 details as above. The Tax due @ 18% along with Interest and Penalty under Section 74 will be levied. The reply given is not accepted and the above defect.
Therefore the tax due, interest under Section 50 and penalty under Section 74 of Tamil Nadu GST Act-2017 determined below.
| Year | Tax due | Interest Delay days –1786 | Penalty | Total | |||
| 2019-20 | CGST | SGST | CGST | SGST | CGST | SGST | |
| Total | 1268683 | 1268683 | 1346403 | 1346403 | 1268683 | 1268683 | 7767538 |
6. The petitioner has made out a prima facie case insofar as Defect No.3 is concerned. However, considering the fact that the petitioner had not filed an appeal or approached this Court earlier, this Court is inclined to remit the case back with respect to Defect No.3, subject to the condition that the petitioner shall deposit 10% of the disputed tax within a period of four weeks from the date of receipt of a copy of this order.
7. The respondent shall thereafter fix a date for personal hearing, and the petitioner shall appear and explain the case afresh.
8. If the petitioner so desires, they may supplement the oral hearing with written submissions on the aforesaid issue.
9. In case the Petitioner complies with the above stipulations, the Respondent shall proceed to pass a final order on merits and in accordance with law as expeditiously as possible, preferably, within a period of three (3) months of such reply/pre-deposit.
10. In case the Petitioner fails to comply with any of the stipulations, the Respondent is at liberty to proceed against the Petitioner to recover the tax in accordance with law as if this Writ Petition was dismissed in limine
11. Needless to state, before passing any such order, the Respondent shall give due notice to the Petitioner.
12. It is made clear that recovery of 10% of the disputed tax ordered above pertains only to the impugned Order dated 19.02.2025 with respect to Defect No.3.
13. This Writ Petition stands disposed of with the above observations.
No costs. Connected Writ Miscellaneous Petitions are closed.