GST assessment order quashed for violating natural justice when show cause notice went unnoticed after registration cancellation

The Madras HC allowed a writ petition challenging a GST assessment order dated 11.10.2023 for July 2017-March 2018, finding violation of natural justice as the show cause notice went unnoticed due to business cessation after GST registration cancellation. The Court quashed the assessment order, directing the petitioner to deposit 25% of disputed tax within 30 days. The impugned order was treated as corrigendum to show cause notice, granting petitioner 30 days to reply, with respondent to pass final orders within two weeks thereafter.

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The Madras High Court, through Justice C. Saravanan, allowed the writ petition challenging the respondent's order dated 11.10.2023 (Reference No. ZD331023060399K) relating to GST assessment for the period July 2017 to March 2018. The petitioner, whose GST registration was cancelled on 30.06.2021, contended that the impugned order was passed without proper notice, violating the principles of natural justice, as the show cause notice dated 03.07.2023 went unnoticed due to cessation of business.The Court noted the respondent's reliance on the Supreme Court decision in Assistant Commissioner (CT), LTU, Kakinada v. M/S. Glaxo Smith Kline Consumer, Health Care Limited (Civil Appeal No. 2413 of 2020), but found merit in the petitioner's plea for an opportunity to represent the case afresh.Key holding: The Court quashed the impugned assessment order dated 11.10.2023, subject to the petitioner depositing 25% of the disputed tax within 30 days. The impugned order was directed to be treated as a corrigendum to the show cause notice, allowing the petitioner 30 days to file a reply. The respondent was directed to pass final orders on merits within two weeks thereafter.The Court clarified that if the demand is dropped, the deposited amount shall be refunded. The writ petition was allowed with no costs, and connected miscellaneous petitions were closed.

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