GST UPDATE

????Desk of CA. Praveen Sharma Series- 532???? 

MADRAS HIGH COURT IN THE CASE OF SMA Tex, Rep. By Its Proprietorunder Section 73 of the GST Act 2017

????A petitioner challenged an order dated 03.03.2023 and the consequential distraint order dated 16.05.2024, arguing that they were unaware of the proceedings due to the cancellation of their GST registration on 27.02.2019 following a notice received on 21.01.2019.

????The petitioner's counsel stated that business losses led to the registration cancellation, preventing participation in the assessment process. The petitioner agreed to remit 10% of the disputed tax demand as a condition for remand.

????The Additional Government Pleader, Mr. T.N.C. Kaushik, asserted that principles of natural justice were followed by issuing a notice in Form GSTR 3A on 05.01.2023. Since the petitioner failed to respond, the assessment was made on a best judgment basis under Section 62.

????The court found that the petitioner should be given an opportunity to contest the tax demand. Therefore, it set aside the impugned order dated 03.03.2023 on the condition that the petitioner pays 10% of the disputed tax demand within two weeks. 

????The petitioner must submit a reply to the show cause notice within this period. Upon receipt and verification of the payment, the first respondent must provide a personal hearing and issue a new order within three months Consequently, the distraint order is also set aside.