2020 (7) TMI 135 - HC - GST

Delay in filing GST returns - demand notice includes the interest and as well as the gross tax whereas it should have been on the net tax excluding the input tax credits - HELD THAT - This writ petition is disposed off directing the 1st respondent to afford an opportunity of being heard to the petitioner with regard to the details expressed in the representation and take a decision as expeditiously as possible within a period of two months from the date of receipt of a copy of this judgment. It is made clear that till such time, the operation of Exhibit-P7 demand notice is ordered to be kept in abeyance.

Issues:
1. Delay in filing GST returns leading to a demand notice.
2. Demand notice based on gross tax instead of net tax.
3. Representation by the petitioner for relaxed measures recommended by GST Council.
4. Legal remedy sought by the petitioner against the demand notice.

Issue 1: Delay in filing GST returns leading to a demand notice

The petitioner, a managing partner of a firm dealing with the trading of areca-nut, faced a demand notice amounting to ?9,72,519 due to a minor delay in filing GST returns. The counsel for the petitioner argued that the demand notice was served based on gross tax without considering the input tax credit, leading to the dispute.

Issue 2: Demand notice based on gross tax instead of net tax

The counsel representing the petitioner contended that the demand notice should exclude input tax credit while calculating the amount owed. The court acknowledged the delay in filing GST returns but emphasized that the demand notice should reflect the net tax liability to ensure fairness and accuracy in the assessment.

Issue 3: Representation by the petitioner for relaxed measures recommended by GST Council

The petitioner submitted a representation (Exhibit-P8) seeking consideration for the relaxed measures recommended by the GST Council on 12.06.2020, including reductions in late fees and other measures to alleviate the burden on taxpayers. The court noted the acceptance of the demand notice by the GST counsel but recognized the moratorium granted on certain aspects.

Issue 4: Legal remedy sought by the petitioner against the demand notice

After hearing both parties and reviewing the case, the court directed the respondent to provide the petitioner with an opportunity to present their case regarding the representation within two months. The court ordered the suspension of the demand notice until a decision is made, allowing the petitioner to continue filing returns without prejudice. The judgment aimed to ensure procedural fairness and a timely resolution of the matter in line with the relaxed measures recommended by the GST Council.

This comprehensive analysis highlights the key issues addressed in the judgment, focusing on the delay in filing GST returns, the discrepancy in the demand notice calculation, the petitioner's representation for relaxed measures, and the legal remedy provided by the court to address the dispute effectively.

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