Assessee allowed to submit an additional reply to a SCN against non-payment of tax within prescribed period under the SVLDRS

The Hon'ble Madras High Court in M/s. P.K. Japee& Co. v. Deputy Commissioner of GST and Central Excise and Ors.[W.P.No.3587 of 2023 and W.M.P.No.3647 of 2023 dated February 7, 2023] has allowed the assessee to submit an additional reply to a Show Cause Notice ("SCN") issued by the Revenue Department. Held that, no prejudice will be caused to the Revenue Department if such additional reply is allowed. Directed the Revenue Department to consider the assessee's reply to the SCN on its merits and to pass fresh orders after providing the opportunity of fair hearing to the assessee and by following the principles of natural justice.

Facts

M/s. P.K Japee& Co. ("the Petitioner") had applied under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 ("the SVLDRS"). The Petitioner failed to make payments on or before the deadline fixed under the SVLDRS and even after several extensions were granted by the Revenue Department ("the Respondent"), the Petitioner failed to make the payments. The Petitioner stated that it was unable to make such payments due to the critical health condition of one of its partners.

Consequently, a SCN dated April 28, 2022 ("the Impugned SCN") was issued and the Petitioner submitted a reply to the Impugned SCN on May 11, 2022. Even before the final order was passed, the Petitioner was informed in the personal hearing that it was liable to pay the interest and penalty amount.

Being aggrieved, this petition has been filed.

The Petitioner has contended that, the entire tax liability has been paid off to the Respondent. Further, the Petitioner has sought for time to file an additional reply to the Impugned SCN.

Issue

Whether the Petitioner be allowed to file an additional reply to the Impugned SCN?

Held

The Hon'ble Madras High Court in [W.P.No.3587 of 2023 and W.M.P.No.3647 of 2023] held as under:

• Stated that, there will be no interference with respect to the Impugned SCN as the same had been passed in accordance with the law.
• Noted that, the Respondent must consider the Petitioner's reply to the Impugned SCN based on its merits and in accordance with the law and only then should the Respondent make a final decision, following the principles of natural justice, which includes providing the Petitioner with the opportunity of hearing.
• Held that, no prejudice would be caused to the Respondent if the Petitioner is allowed to submit an additional reply.
• Directed the Petitioner to submit an additional reply to the Impugned SCN within a period of 2 weeks.
• Directed the Respondent to pass orders after the considering the replies submitted by Petitioner and after affording the opportunity of fair hearing.
• Further directed the Respondent, to refrain from taking any coercive steps against the Petitioner, until the final orders are passed.