2024 (7) TMI 413 - HC - GST

GST Demand Order Quashed: Procedural Flexibility Prevails, Petitioner Granted Opportunity to Respond Within 30 Days

M/s. Cognax Automation Private Ltd., Represented by its Director B. Heerajan. Versus The State Tax Officer (Main), Tuticorin

HC allowed the writ petition challenging a GST demand order of Rs. 4,86,911.70. Despite procedural limitations, the court exercised discretion to quash ... Violation of principles of natural justice - petitioner was unaware of the notices that preceded the impugned order - HELD THAT:- Considering the fact that the amounts have been recovered on 06.03.2024 and 19.03.2024, pursuant to the attachment made on 13.02.2024, this Court is inclined to grant partial relief to the petitioner as the discretion is exercised in favour of the petitioner. Hence, the impugned order is quashed and the case is remitted back to the respondent to pass fresh orders. The impugned order, which stands quashed, shall be treated as addendum to the show cause notices that preceded the impugned order - Petition allowed. Issues involved:1. Confirmation of demanded amount against the petitioner in the impugned order.2. Petitioner's unawareness of notices preceding the impugned order.3. Merits of the Writ Petition and the need for one opportunity to explain the case.4. Argument on the limitation for filing a statutory appeal under Section 107 of GST enactments.5. Recovery of amounts and exercise of discretion in favor of the petitioner leading to the quashing of the impugned order.Detailed Analysis:1. The judgment addresses the confirmation of the demanded amount against the petitioner in the impugned order, which was passed on 28.07.2022 in Form GST DRC 07. The impugned order confirmed the amounts to be demanded from the petitioner based on the notice preceding the order. The confirmed amounts included SGST, CGST, interest, and penalty, among others, totaling to Rs. 4,86,911.70. The petitioner challenged this order, leading to a detailed consideration by the court.2. The petitioner, represented by learned counsel, argued that they were unaware of the notices preceding the impugned order. The petitioner only became aware of the order and notices posted on the GST common portal after their bank account was attached, and amounts were recovered. The recovery occurred on specific dates in 2024, prompting the petitioner to seek an opportunity to explain their case due to being a small-time operator.3. The court considered the merits of the Writ Petition, taking into account the petitioner's argument for one opportunity to present their case. The Additional Government Pleader for the respondent contended that the petition lacked merit and should be dismissed due to delays in filing after the impugned order was issued. However, the court exercised discretion in favor of the petitioner, considering the recovery dates and decided to grant partial relief by quashing the impugned order and remitting the case back to the respondent for fresh orders.4. The respondent's argument highlighted the limitation for permitting the petitioner to file a statutory appeal under Section 107 of the GST enactments. Citing relevant legal precedents, the respondent argued that the limitation had expired, making the Writ Petition liable for dismissal. The court acknowledged these arguments but ultimately decided to grant relief to the petitioner based on the recovery dates and the exercise of discretion.5. In conclusion, the court quashed the impugned order and directed the respondent to pass fresh orders on the case. The quashed order was to be treated as an addendum to the preceding show cause notices. The petitioner was given 30 days to file a reply, and the respondent was instructed to pass fresh orders expeditiously, preferably within three months, ensuring the petitioner's right to be heard. The Writ Petition was allowed with the mentioned directions, and no costs were imposed, closing the connected miscellaneous petitions.