Clipped from: https://www.taxscan.in/maximum-of-three-personal-hearings-must-be-provided-pursuant-to-gst-drc-01-notice-madras-hc/465722/
Maximum three personal hearings is not a directory, it is mandatory
By Navasree A.M – On December 12, 2024 12:09 pm – 2 mins read
The Madurai bench of Madras High Court has ruled that a maximum of three personal hearings must be granted to the assessee in compliance with provisions under the Goods and Services Tax ( GST ) Act pursuant to Form GST DRC-01 notice. The court set aside an impugned order for failing to provide the petitioner with the mandated third hearing.
The petitioner submitted that after receiving the DRC-01 notice dated May 21, 2024, they submitted replies via the portal and participated in hearings on July 2, 2024, and July 12, 2024. On July 12, they requested additional time to submit further documents and sought rescheduling of the hearing.
However, without granting the third hearing, the respondent passed the final order. The petitioner contended that this action was contrary to the mandatory requirement of granting three personal hearings.
The respondentтАЩs counsel argued that the provision for three hearings was directory, not mandatory, and the petitioner had failed to produce documents despite prior opportunities.
The court observed that the petitioner had filed a manual reply on July 10, 2024, requesting further time for personal representation and document submission. The first respondent-STO (inspection)тАЩs decision to pass the final order without allowing the third hearing violated the prescribed procedure.
Through this decision, the court clarified that maximum 3 personal hearings should be granted to the assessee. It rejected the respondentтАЩs counselтАЩs submission that the provision for 3 hearings was directory and not mandatory.
While setting aside the contested order, Justice Kumaresh Babu directed the respondent to provide a personal hearing to the petitioner. It was instructed that the petitioner to appear before the authority on December 24, 2024, for the hearing. The respondent was ordered to pass a fresh order based on the merits of the case and the documents submitted by the petitioner. Accordingly, the petition was disposed of.To Read the full text of the Order CLICK HERE
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Tvl.Bharath Transports vs The State Tax Officer
CITATION: 2024 TAXSCAN (HC) 2467
Case Number: W.P.(MD) No.28798 to 28803 of 2024
Date of Judgement: 05 December 2024
Counsel for Appellant: N.Bharathi
Counsel for Respondent: R.Suresh Kumar
Topics
GSTGST DRC-01Justice K Kumaresh BabuMadras High Court
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Entities Claiming Charitable Status under GPU cannot Exceed 20% of Gross Receipts from Commercial Activities: Madras HC [Read Order]
Considering the entity claiming charitable status under GPU exceeded 20% of gross receipts from commercial activities, the Madras HC remanded matter to AO for computation of income
By Kavi Priya – On December 12, 2024 11:49 am – 2 mins read
In a recent ruling, the Madras High Court ruled that entities claiming charitable status under the тАЬgeneral public utilityтАЭ ( GPU ) category as defined in Section 2(15) of the Income Tax Act, 1961, must make sure that income from commercial activities does not exceed 20% of their gross receipts.
SAE India, the petitioner is a trust engaged in technical education and promotion of mobility engineering through activities such as technical meetings, workshops, and seminars.
The trust claimed an exemption under Section 2(15) of the Income Tax Act citing that its activities qualified as a тАЬcharitable purpose.тАЭ The Deputy Commissioner of Income Tax challenged the claim stating the activities of the trust were in the nature of trade, commerce, or business.
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The Chennai bench of the Income Tax Appellate Tribunal (ITAT) reviewed the matter and ruled that the trustтАЩs activities fell under the last limb of Section 2(15) which related to objects of general public utility.
The tribunal determined that the trustтАЩs activities, including conducting paid workshops, training sessions, and conferences, constituted trade, commerce, or business.
The tribunal found that the gross receipts from these activities exceeded 20% of the total income violating the proviso to Section 2(15) of the Income Tax Act, 1961 (which imposes limits on commercial receipts for charitable organizations).
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The tribunal rejected the petitionerтАЩs method of computing income stating that gross receipts must be considered for the threshold, not net income. The tribunal remanded the case back to the assessing officer for verification of financial statements and computation of income.
The petitioner filed an Appeal before the High Court challenging the ITATтАЩs order. The Bench comprising Justice R. Suresh Kumar and Justice C. Saravanan upheld the ITATтАЩs findings ruling that the tribunalтАЩs conclusions on factual matters were final unless a substantial question of law arose.
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The court dismissed the appeal upholding the ITAT findings. The court remanded the matter back to the assessing officer for further examination and no costs were awarded in the judgment.To Read the full text of the Order CLICK HERE
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