Interest demand dismissed as tax authority failed to justify rejection of taxpayer's claim.

Facts

A recent court ruling has provided relief to a taxpayer who faced hefty demands, including interest, for allegedly delayed tax payments. The taxpayer had inadvertently filed nil GSTR-3B returns for several months due to an accountant's error. Despite paying the entire tax within the stipulated time, the tax authorities issued demand notices.

Key Points from the Case

• Incorrect GSTR-3B Filing: The taxpayer mistakenly filed nil GSTR-3B returns for multiple months.
• Timely Tax Payment: Despite the incorrect filings, the taxpayer had actually paid the entire tax on time.
• Demand Notices Issued: The tax authorities issued demand notices including interest for delayed payment.
• Court Intervention: The taxpayer challenged the demand notices in court.
• Lack of Reasons: The court found that the tax authorities failed to provide sufficient reasons for rejecting the taxpayer's explanation.
• Violation of Natural Justice: The court deemed the demand notices as a violation of the principles of natural justice.

The Court's Verdict

The court, in a significant judgment, set aside the demand notices issued by the tax authorities. The crux of the court's decision was the absence of valid reasons for rejecting the petitioner's explanation. The tax authorities had failed to provide specific grounds for disregarding the evidence of timely tax payment.

GST Case Law Lids Advertisers Versus The Deputy State Tax Officer

Citation-2024 TAXONATION 1341 (KERALA)

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