Unaware of GST Demand Order until Bank Account Frozen: Madras HC directs Re-adjudication on 10% Pre-deposit

The Madras High Court recently set aside a Goods and Services Tax (GST) demand order issued against Vishagan Architectural Solution due to procedural lapses. The petitioner discovered the order only after their bank account was frozen, violating principles of natural justice. The dispute arose from discrepancies between their GSTR-3B return and auto-populated GSTR-2A. Despite the department's issuance of show cause notices and a hearing, the petitioner claimed ignorance of the order. The court, under Justice Senthilkumar Ramamoorthy, found merit in the petitioner's plea and remanded the matter for re-adjudication. They directed the petitioner to deposit 10% of the disputed tax within 15 days and allowed them to respond to the notice within the same period. The respondents were instructed to provide a fresh decision within three months. This case underscores the importance of procedural fairness in tax disputes.