2020 (11) TMI 657 - HC - GST

Principles of Natural Justice - Validity of assessment order - replies have not been considered by the respondents under the impugned assessment order - HELD THAT - In the instant case, the objections raised by the petitioner through their various replies, in which they have reiterated that they are ready and willing to produce books of accounts, were not considered in the impugned assessment order. But the impugned assessment order only based on the alleged deposition made by the petitioner before the Inspecting Officials that they are not maintaining books of accounts without any independent assessment. This Court has also perused and examined the various replies sent by the petitioner and as seen from the said replies, there is no admission on the part of the petitioner that they were not maintaining books of accounts at the time when the Inspecting Offiicials visited the petitioner's place of business. It is also the contention of the petitioner that they have claimed only the eligible input tax credit and there is no bogus claim. However, as seen from the impugned assessment order, as observed earlier, the respondents have mechanically and blindly accepted the alleged statement given by the petitioner before the Inspecting Officials without independently giving reasons after duly considering the objections raised by the petitioner, wherein, they have categorically pleaded that they are always ready and willing to furnish books of accounts to the respondent. The respondents have also not duly considered in the impugned assessment order with regard to the petitioner's claim of input tax credit as per GSTR-3B filed by him. The impugned assessment order passed by the second respondent is arbitrary and is in violation of the principles of natural justice, since no sufficient opportunity was granted to the petitioner nor did the respondents consider all the objections raised by the petitioner - matter is remanded back to the second respondent for fresh consideration and the second respondent shall pass final orders on merits and in accordance with law - Petition allowed by way of remand.

Summary

Issues:
Challenge to assessment order on grounds of arbitrariness and violation of principles of natural justice.

Analysis:
The Writ Petition challenges an assessment order dated 08.11.2019, contending that it is arbitrary and illegal, violating principles of natural justice. The petitioner had sent detailed objections in response to a pre-assessment notice, emphasizing readiness to produce books of accounts and claiming only eligible input tax credit under GSTR-3B returns. Despite multiple replies, the respondents allegedly did not consider the objections, leading to the filing of this petition.

The petitioner's counsel argued that the petitioner consistently expressed willingness to produce books of accounts and claimed genuine input tax credit. However, the respondents, through the impugned assessment order, alleged that the petitioner did not maintain books of accounts and made a non-genuine tax credit claim. The Special Government Pleader contended that the objections were considered, and any grievance should be addressed through statutory appeal rather than Article 226 of the Constitution.

Upon review, the Court found that the respondents failed to consider the petitioner's objections adequately. The assessment order relied on an alleged statement by the petitioner regarding the absence of books of accounts without independent assessment, contrary to the petitioner's repeated readiness to furnish accounts. The Court referenced a previous judgment emphasizing the need for valid reasons in accepting such statements. It noted that the assessment order did not address the petitioner's input tax credit claim as per GSTR-3B.

Consequently, the Court deemed the assessment order arbitrary and a violation of natural justice due to insufficient opportunity granted to the petitioner and inadequate consideration of objections. The order was quashed, and the matter remanded to the respondents for fresh consideration within eight weeks, ensuring the petitioner's right to a personal hearing. The Writ Petition was disposed of without costs, and the connected miscellaneous petition was closed.