TaxTMI 
TaxTMI 
TaxTMI 
The provisions of GST laws provide for the self-assessment of tax and pay the same to the credit of the exchequer of the Government. If the taxable person fails to pay the tax he is liable to pay interest for belated payment and also for belated filing of the returns. For such contraventions the Department may issue show cause notice indicating the contraventions of the tax payer with directions to give reply to the department within the period as stipulated in the show cause notice. On receipt of the notice, the Assessing Officer may consider the said reply and pass orders. Normally the reply may be filed by the tax payer itself and appear personally before the Assessing Officers.
Many of the tax payers engage their own employees for this purposes or engage professionals such as Advocates, Chartered Accountants, Company Secretaries, Cost Accountants etc. The provisions of GST laws also provide to take assistant from GST practitioner. A GST practitioner is a tax professional authorised by the government and registered on the GSTN portal to perform various tax-related tasks on behalf of taxpayers. This includes filing returns, making tax payments, and representing them during audits, among other responsibilities. The tax payer has to select such qualified professionals to represent his/her case before the authorities concerned.
Now many unqualified professionals are there for both direct and indirect taxes. The unqualified professionals may know the provisions of the laws, rules and regulations. The wrong advice given by such persons will result harms to the tax payer. Therefore, the tax payer is very careful in selecting the consultants for them.
In ‘Chandrasekaran v. Assistant Commissioner, Karur and Axis bank’ – 2025 (8) TMI 1336 - MADRAS HIGH COURT, the Department issued notice on 22.05.2024 to the petitioner and uploaded all the notices and communications under the ‘View Additional Notices and Orders’ in the GST common portal. A reply to the notice was given by the petitioner through his consultant on 18.07.2024. The reply filed by the petitioner through his consultant is unrelated to the issues raised in the show cause notice. The Assistant Commissioner, the first respondent, passed the order on 21.08.2024. The accounts of the petitioner in the second respondent bank were also freezed by the Department. Therefore, the business of the petitioner came to a standstill.
The petitioner, being aggrieved against this order, filed the present writ petition before the High Court, challenging the impugned order. The petitioner submitted before the High Court due to the mistake on the part of the consultant, he filed the reply which is not relevant to the show cause notice. Since the bank accounts were freezed by the Department the business of the petitioner was heavily affected the petitioner and his 6 workers. The petitioner is willing to pay 25% of the tax amount to the Department. The petitioner, therefore, prayed that he might be given an opportunity to present his case before the First respondent and setting aside the impugned order.
The Department contended that subject to the payment of 25% of tax dues, the case may be remitted back to the first respondent for fresh consideration.
The High Court considered the submissions of the parties. The High Court observed that the petitioner filed irrelevant reply to the show cause notice issued to him, on the basis of the ill advise given by his consultant. The High Court mentioned that the High Court came across similar instances in several cases, extending ill advice to the clients by the consultants who are qualified persons. Because of such ill advises the clients are not in a position to appear before the Officers concerned with suitable reply supported by document which is purely on the negligence on the part of the consultant.
The High Court felt that such type of wrong advice given by the unqualified consultants cannot be accepted. The High Court directed the department to issue notice/circular to the assessees to engage and get advice from qualified consultants. Or the assessees may file petitions/reply through their employees or relatives. The ill advance given by the unqualified consultant would generally on account of the work burden in which they are used to advise very many clients. As and when the assessee approaches these types of consultants, in order to ensure that the assessee does not go out of their hands, the unqualified consultants violate Acts. The High Court witnessed many such type of cases. Therefore, the High Court directed to issue proper circular to the assessee in respect of engagement of a qualified consultant.
Considering the difficulties faced by the petitioner by means of freezing of his bank account and considering the workers, the High Court set aside the impugned order subject to the payment of 25% of the tax due to the department, as agreed by the petitioner, within a period of 4 weeks from the date of receipt of the copy of the order. The setting aside of the order will be taken effect from the date on which the petitioner deposited 25% of the tax due to the department. Further the High Court directed the petitioner to file reply to the show cause notice with supporting documents within a period of 3 weeks from the date of payment of 25% of tax dues with the department.
The High Court also directed the Department to take suitable action to release the freezed account of the petitioner immediately on receipt of the order of the High Court.