Opportunity to Contest Tax Demand Should Not Be Denied Due to Accountant’s Negligence

By: Admin | August 19, 2024 | Categories: Important Pronouncements | 4 Min Read

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Madras High Court Rules in Favor of Petitioner in Stem Infrastructure Case

In Stem Infrastructure v. Assistant Commissioner (GST) [W.P. No. 12406 of 2024 dated June 07, 2024], the Madras High Court overturned an assessment order. The Court granted the assessee a chance to challenge the tax demand. The assessee could not file a reply because their accountant failed to inform them about the revenue department’s proceedings.

Case Facts

Stem Infrastructure (“the Petitioner”) challenged the order dated December 18, 2023 (“the Impugned Order”) through a writ petition. The Revenue Department (“the Respondent”) issued this order after sending several reminders before issuing the Show Cause Notice (“the SCN”). The Petitioner argued they did not know about the proceedings because their accountant did not communicate the department’s actions.

Issue

The main question was whether the Petitioner should lose the chance to contest the tax demand due to their accountant’s negligence.

Court’s Decision

The Madras High Court decided in W.P. No. 12406 of 2024 that the Petitioner deserved a fair opportunity to challenge the tax demand. Therefore, the Court set aside the Impugned Order but required the Petitioner to pay 10% of the disputed tax. The Court allowed the Petitioner to reply to the SCN and directed the Respondent to provide a reasonable opportunity, including a personal hearing, before issuing a new assessment order.

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CLICK HERE: https://a2z-bucket.s3.ap-south-1.amazonaws.com/stem.pdf

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https://aaermlawassociates.com/madras-high-court-assessment-order-overturned/

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