Home GST Non-Present Suppliers Cannot be Verified for GST Demand With out Giving Them a Probability to be Heard

Non-Present Suppliers Cannot be Verified for GST Demand With out Giving Them a Probability to be Heard

Non-Present Suppliers Cannot be Verified for GST Demand With out Giving Them a Probability to be Heard
Madras High Court's Order for M/s. M.B.M. Steels

Within the matter of M/s. M.B.M. Steels vs. The Help Commissioner (ST), the Madras Excessive Court docket said that if the taxpayer obtained an inward provide from a non-existent taxpayer, the petitioner must be given a possibility for a private listening to earlier than pursuing restoration motion.

The petitioner is a supplier of {hardware} and has a GST registration underneath the respondent’s jurisdiction. On 01.08.2022, the respondent knowledgeable the petitioner that an examination of his GSTR-3B returns vis-a-vis GSTR-2A returns revealed that the petitioner obtained an inward provide from a non-existent taxpayer (Solar Steels), for which he claimed an enter tax credit score of Rs. 71,604/- (CGST: Rs. 35,802/- + SGST: Rs. 35,802/-).

The instruction additional stated that the petition was submitted via the portal. Nevertheless, the taxpayer has not responded to the identical. Because of this, the submission was permitted to get better Rs. 71,604/- plus a penalty of the identical quantity underneath Part 74 of the Tamil Nadu Items and Providers Tax Act, 2017.

The petitioner is stating that the respondent claimed to have despatched them two notices: one on 28.03.2022 and one other on 21.04.2022 asking the petitioner to pay Rs. 71,604 together with an equal quantity as a penalty. Nevertheless, the petitioner is arguing that they by no means obtained any additional discover for a private listening to after the present trigger discover was issued. They’re involved about not being given a possibility to current their aspect of the purpose both via the portal or via the publish.

As a consequence, the petitioner claims that he wasn’t given an opportunity to defend himself, and this lack of alternative goes in opposition to the ideas of pure justice. This, in flip, makes the respondent’s resolution appear arbitrary. Subsequently, the petitioner seeks to problem and put aside the order.

Moreover, the petitioner argues that Solar Steels is an current firm with a legitimate GST registration. The submitted paperwork additionally present that Solar Steels filed a GST return and paid taxes associated to the provides made by the petitioner.

The counsel representing the petitioner identified that the explanation for issuing a present trigger discover was that the provider of the petitioner was non-existent. Nevertheless, this argument doesn’t stand as a result of the provider, Solar Steels, is registered underneath GST (Items and Providers Tax) and has paid taxes for the availability made to the petitioner.

The petitioner’s counsel contends that if the petitioner had been given an opportunity for a private listening to, they might have said their level to the respondent. The respondent has not disputed this reality. Because the petitioner was not given a possibility to current their paperwork and proof to counter or show their level in opposition to the respondent, particularly after they have paperwork that would disprove the declare, the order that was issued in opposition to them was liable to be put aside. Subsequently, the choice has been overruled based mostly on the conclusion.

After reviewing the matter, the Writ Petition is granted, and the impugned order is remitted again to the respondent for a recent overview. The petitioner should put together copies of the papers talked about within the impugned order, together with the bill copy, GST e-Means invoice copy, and fee particulars.

The said paperwork should be offered inside one week after receiving a replica of this resolution, and the responder should overview them and challenge orders inside six weeks of receiving them. There are not any prices. Because of this, the related miscellaneous petitions have been closed.


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