Madras HC Declares Order Invalid Without Considering Assessee Response

In a recent instance, the High Court (HC) of Madras ruled that the ruling made in accordance with section 74 of the GST, 2017, without taking the assessee’s response into account, is invalid.

Engineering aids, on 5/04/2022, the applicant questioned the impugned order issued under section 74 of the goods and services tax act 2017 via respondents on the basis of the breach of principles of natural justice.

The Determination of Tax Not Paid or Short Paid or Incorrectly Refunded or Input Tax Credit Wrongly Accessed or Used Because of Fraud or Any Willful-Misstatement or Suppression of Facts was covered in Section 74 of CGST 2017.

It argued despite they furnishing an answer on 25.02.2022 in Form GST DRC-06 to the show cause notice which respondents issued on 17.02.2022, in Form GST DRC-01, it does not get acknowledged in the impugned order on 5.04.2022 through the respondents.

Moreover, he alleged that only a summary of the ruling dated 05.04.2022 passed under Form GST DRC-07 was served on him and that the entire order was not placed on the respondents’ website. The petitioner has also submitted Form GST DRC-06, dated 25.02.2022, which indicates that the petitioner’s reply dated 25.02.2022 was received by the respondents.

The reply dated 25.02.2022 was not mentioned, and the assailed ruling likewise did not take that reply into account. The speaking order has not been served; just the summary of the order has been.

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

Judge Abdul Quddhose presided over a one-person bench that made the observation that the petitioner’s reply had not been taken into account by the respondent. The Court reversed the respondents’ impugned ruling, dated April 5, 2022, and remanded the case to them for further examination of the merits and the law.

The court ordered the respondent to follow the rules of natural justice and to provide the petitioner with a personal hearing before making final decisions within twelve weeks of receiving a copy of this ruling.