Anandha Medicals vs. Deputy State Tax Officer -1

Held

The Court held that the impugned order dated 04.05.2023 should be set aside. The petitioner is directed to deposit 25% of the disputed tax within two weeks of receiving a copy of the order. Upon compliance, the bank attachment will be lifted. The impugned order of assessment is to be treated as a show cause notice, and the petitioner must submit their objections along with supporting documents within four weeks of receiving a copy of the order. The respondent is then required to consider these objections, afford the petitioner a reasonable opportunity of hearing, and pass orders in accordance with the law. The Court stipulated that if the deposit is not made or objections are not filed within the specified periods, the impugned order of assessment shall stand revived. The Court did not expressly leave any issue undecided.

Facts

The petitioner, Anandha Medicals, represented by its Proprietrix P. Krishnaveni, filed a writ petition challenging an order dated 04.05.2023 passed by the Deputy State Tax Officer – 1, Commercial Taxes Department, Rajapalayam. The order pertains to the tax period 2017-2018. The petitioner stated that they filed their return for the said period. However, they failed to respond to a notice (Form GST DRC-01A dated 09.01.2023) issued by the respondent regarding a mismatch between GSTR-2A and GSTR-3B due to medical reasons. The petitioner sought an opportunity to explain the discrepancies and offered to pay 25% of the disputed tax. The respondent's counsel did not raise serious objections to this proposal.

Key Issues

1. Whether the petitioner should be granted an opportunity to explain the alleged mismatch between GSTR-2A and GSTR-3B for the tax period 2017-2018, given their inability to respond to the notice due to medical reasons? Petitioner's Arguments: The petitioner argued that due to medical reasons, they were unable to file a reply to the notice dated 09.01.2023 and participate in the adjudication proceedings. They contended that if provided an opportunity, they could explain the alleged discrepancies between GSTR-2A and GSTR-3B. They also relied on a judgment of this Court in M/s.K.Balakrishnan, Balu Cables vs. O/o. the Assistant Commissioner of GST & Central Excise in W.P.(MD)No.11924 of 2024. Furthermore, the petitioner expressed willingness to pay 25% of the disputed tax and sought the lifting of bank attachment, requesting one final opportunity before the adjudicating authority. Respondent's Arguments: The respondent, through the Additional Government Pleader, did not raise serious objections to the petitioner's request for an opportunity and the proposed conditions.