2024 (2) TMI 132 - HC - GST

Tax demand arising out of discrepancies between Form GSTR-1 and Form GSTR-2A - mismatch between GSTR-3B and GSTR-1 as regards outward supply of goods and services - no personal hearing was provided - Violation of principles of natural justice - HELD THAT - The documents on record disclose that the intimation in Form GST-DRC-01A was issued on 27.09.2023 and that, even without waiting for a reasonable period, the show cause notice in Form GST-DRC- 01 was issued on 29.09.2023. The petitioner replied promptly on 30.10.2023 and requested for a personal hearing to enable the petitioner to place relevant documents on record. The record shows that a reminder letter dated 18.12.2023 was issued by the respondent requesting for a reply to the show cause notice and that the petitioner requested for a month's time to do so by reply dated 25.12.2023. The said reply dated 25.12.2023 was disregarded. In effect, in spite of request, no personal hearing was provided and there was breach of principles of natural justice. For that reason, the impugned order warrants interference. The impugned order dated 30.12.2023 is quashed. As a corollary, the matter is remanded for re-consideration. After providing a reasonable opportunity to the petitioner, including a personal hearing, the respondent is directed to issue a fresh assessment order within a period of two months from the date of receipt of a copy of this order.

Summary

Issues involved:
The judgment involves the assessment order dated 30.12.2023 concerning tax demand arising from discrepancies between Form GSTR-1 and Form GSTR-2A. The main issues are the lack of personal hearing and violation of principles of natural justice.

Assessment of Tax Demand:
The petitioner, engaged in trading medical equipment, received notices and submitted replies requesting a personal hearing to present relevant documents. The impugned order was issued without providing a personal hearing despite requests, violating Section 75(4) of the Tamil Nadu Goods and Services Tax Act, 2017. The challenge was limited to Input Tax Credit (ITC) issue, as the demand related to outward supply was complied with.

Violation of Principles of Natural Justice:
The respondent failed to provide a personal hearing despite requests, leading to a breach of natural justice principles. The petitioner promptly replied to notices and requested time to respond, but the requests were disregarded. The impugned order was issued without due consideration, warranting interference.

Court Decision:
The High Court quashed the impugned order dated 30.12.2023 and remanded the matter for reconsideration. The respondent was directed to issue a fresh assessment order within two months, after providing a reasonable opportunity to the petitioner, including a personal hearing. The case was disposed of accordingly, with related motions closed.