HC Quashed Order as Documents Submitted by Assessee Were Not Duly Considered & No Hearing Provided

Case Details: Kumaran Cotspin v. Deputy State Tax Officer - [2024] 161 taxmann.com 289 (Madras)

Judiciary and Counsel Details

• Senthilkumar Ramamoorthy, J.
• R.D. Ganesan for the Petitioner. 
• Mrs K. Vasanthamala, Govt. Adv. (Taxes) for the Respondent.

Facts of the Case

The petitioner was a dealer in polyester yarn and had filed returns pertaining to the period 2017-18. The department issued a show cause notice upon noticing the disparity between the petitioner’s GSTR-3B returns and the auto-populated GSTR-2A returns. The petitioner submitted a reply along with documents such as cash ledger details, reconciliation report, purchase register, details of taxable inward supplies received from registered suppliers, etc.

However, the assessment order was passed against the petitioner. It filed writ petition against the assessment order and contended that documents submitted by petitioner were not duly considered and it was not provided a reasonable opportunity of hearing.

High Court Held

The Honorable High Court noted that the entire tax liability was on account of disparity between GSTR-3B return and auto-populated of GSTR-2A return. The Court also noted that as per the reply of petitioner, documents which proved that purchases were genuine, were also submitted. Therefore, it was just and necessary that petitioner should be provided with an opportunity of hearing to effectively deal with tax demand. Thus, it was held that the impugned assessment order was to be set aside and the department was directed to provide a reasonable opportunity to the petitioner.