GST: HC Deletes Order Over Barred from Hearing Opportunity U/S 74(1)

The Madurai Bench of Madras High Court headed by Mr. Justice M. Nirmal Kumar has refused the assessment order issued without delivering a proper chance for a personal hearing under section 74(1) of the Goods and Service Tax Act.

The applicant, M/s. Anantham Silks, trading of textiles and garments. At the time of investigation, the team revealed some mismatches in the transaction of the dealers, and an amendment of the inspection was on the ground of the search report. The applicant is unable to provide you with a satisfactory explanation with supporting documents. Thus the resident confirmed the tax demand, penalty and interest proposed incurred in Form GST DRC-01A for the 4 assessment years.

The aggrieved applicant furnished a writ petition in the High court. The counsel to the applicant submits, that the search would be held by distinct officers in an incorrect way, which results in the misconception of the tariff, and exemption notifications. Indeed, counsel, the performed proceedings were completely perverse and facts and statements contained with intimation, an appeal of dropping of proceedings, are in breach of principles of natural justice and unpredictable and the demand incurred in Form DRC-01A needs to be denied.

Read Also: Madras HC Orders Dept for Issuing GST DRC-1 Notice U/S 74(1)

The single bench sees that the respondent was not able to comply with the process since the applicant has obtained any complaint and does not furnish tax as shown, a show cause notice would be given under Section 74(1) of the TNGST Act and post to obtaining objections, providing the personal hearing, the assessment order needs to be completed.

The High Court while permitting the Writ petition ruled that “the respondent is directed to issue notice after following the procedures prescribed under the TNGST Act and issue GST show cause notice and after giving an opportunity to file their objections, pass appropriate orders on merits and in accordance with law.”

On behalf of the appellants and respondents respectively, Mr. L. S. Karthikeyan and Mr. P. Subbaraj appeared.