Taxpayer Wins Challenge Against GST Tax Demand Due to Procedural Flaws in Notice Issuance and Insufficient Opportunity to Respond

HC allowed the writ petition challenging a GST tax demand notice, finding the original notice procedurally defective. The court determined that adequate opportunity to respond was not provided to the taxpayer, as notice was only given to the consignment driver. HC quashed the original demand order and directed respondent to issue a fresh notice with proper opportunity for the taxpayer to submit objections within eight weeks.

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Issues:
Challenge to impugned order of Demand of Tax and Penalty in Form GST MOV-09 for inadequate opportunity to respond.

Analysis:
The Writ Petition was filed seeking a Writ of Certiorarified Mandamus to quash the impugned order of Demand of Tax and Penalty in Form GST MOV-09, dated 21.10.2022, and to direct the respondent to release the goods of the petitioner. The petitioner, an assessee under GST MOV-09, had a branch office in Tamil Nadu. The petitioner claimed that a consignment was mistakenly mentioned as transported to Chennai, leading to the issuance of the impugned notice. The petitioner contended that adequate opportunity was not granted as the notice was not received. The respondent argued that notice was given to the consignment driver and an E-Mail notice was also issued on the same date.

Upon hearing both parties, the Court found that the petitioner was not given adequate opportunity to respond. It was noted that the petitioner did not receive the show cause notice, and issuing the notice only to the driver was deemed inadequate under the GST Act. Consequently, the Court held that the impugned order was to be set aside. The Writ Petition was allowed, quashing the impugned order of Demand of Tax and Penalty in Form GST MOV-09, dated 21.10.2022. The respondent was directed to issue a fresh notice, allowing the petitioner to submit objections. The respondent was further instructed to pass a speaking order within eight weeks from the date of receipt of the order. No costs were awarded, and connected miscellaneous petitions were closed.

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