GST Demand Order passed in Violation of Natural Justice Principles: Madras HC disposes of Petition on Pre-deposit Condition

The Madras High Court overturned a GST demand order due to a perceived breach of natural justice principles. The case involved M/s. Sri Bhavani Electricals & Hardwares, who had opted for the GST composition scheme. Despite submitting their turnover details, subsequent tax demands were based on incorrect figures and lacked proper communication of notices. \r

The petitioner's counsel argued for setting aside the order, citing procedural lapses and the petitioner's unawareness of crucial notices. Justice Senthilkumar Ramamoorthy agreed, remanding the matter for reconsideration by the tax authorities. The court imposed a 10% pre-deposit requirement on the disputed tax amount, allowing the petitioner to respond to the notice and participate in a fresh decision-making process within a specified timeframe. This decision underscored the importance of procedural fairness in tax disputes under GST regulations.