HC Set-Aside Order as Department Didn’t Verify Financial Statements & Assessee Failed to Participate in Proceedings

Case Details: Tvl. International Construction Co. v. Assistant Commissioner (ST) [2024] 166 taxmann.com 206 (Madras)

Judiciary and Counsel Details

• Senthilkumar Ramamoorthy, J.
• P. Rajkumar for the Petitioner.
• C. Harsharaj, AGP (T) for the Respondent.

Facts of the Case

The petitioner was engaged in construction business. The department conducted scrutiny of returns and issued show cause notice (SCN) regarding recovery of demand raised in GST DRC-07. Thereafter, the order was passed but the petitioner did not have a reasonable opportunity to contest the tax demand on merits and filed writ petition against the same.

High Court Held

The Honorable High Court noted that the impugned order disclosed that discrepancies were based on a comparison of profit and loss account and petitioner’s GSTR returns but financial statements appear to be prima facie prepared on basis of All India data. These aspects were required to be verified by assessing officer on closely examining all relevant documents.

Also, the other discrepancies based on difference between GSTR returns and financial statements might also require reconsideration. However, the petitioner failed to participate in proceedings in spite of being provided several opportunities. Therefore, it was held that the impugned order was to be set aside on condition that petitioner would remit 10% of disputed tax.