Madras High Court Rejects GST Registration Cancellation Due to Temporary ID Notice
By: Admin
June 26, 2024
Categories: GST Recent News
4 Min Read
The Madras High Court recently examined a case involving Annalakshmi Stores in Mettur, Tamil Nadu, where the store’s GST registration was canceled, and tax liability was assessed due to procedural errors. The court, led by Justice Senthilkumar Ramamoorthy, noted that the show cause notices were not served correctly as per Section 169 of the Central Goods and Services Tax Act, 2017 (the CGST Act). These notices were uploaded to a temporary ID that the store could not access, which was against the required methods of physical delivery, registered mail, or email.
Annalakshmi Stores’ GST registration was canceled retrospectively from August 31, 2017, due to non-filing of returns for six consecutive months. The GST department issued show cause notices in Form GST ASMT-14, but these were not accessible to the store. The store argued that they were unaware of the notices, which prevented them from filing returns or appeals against the tax demands.
The store’s counsel contended that the issuance of show cause notice in Form GST ASMT-14 was mandatory if proceedings were initiated under Section 63. They argued that uploading such a notice on the temporary ID did not constitute proper service as per Section 169 of the applicable GST enactment. The GST department, however, claimed that the temporary ID was accessible to the petitioner, but the court found that the store was not given a fair opportunity to participate in the assessment process.
The court observed that the taxable value was calculated based on the total purchase value, with freight, miscellaneous charges, and gross profit added. This calculation was done without giving the petitioner a chance to present their case. Therefore, the court set aside the assessment orders passed under Section 63 and the show cause notices due to non-compliance with procedural requirements and principles of natural justice. The case was sent back to the GST department for reconsideration, ensuring proper service of notice and giving the petitioner an opportunity to be heard.
The case is titled “Annalakshmi Stores v. Deputy State Tax Office and Another”.
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