2024 (2) TMI 1182 - HC - GST

Validity of assessment order - proceedings were initiated against the petitioner by issuing an intimation and show cause notice - exercise of discretionary jurisdiction - HELD THAT - The assessing officer had dropped proceedings in respect of the tax liability arising out of alleged discrepancy between the GSTR-1 and GSTR-3B returns and RCM on inward supply, whereas the revenue abstract at the foot of the order specifies liability in respect of these heads. Thus, the impugned assessment order suffers from non application of mind resulting in patent errors. For such reason, the impugned assessment order warrants interference. The impugned assessment order is quashed and the matter is remanded for re-consideration. The respondent is directed to provide a reasonable opportunity to the petitioner, including a personal hearing, and thereafter issue a fresh assessment order within a maximum period of two months from the date of receipt of a copy of this order. Petition allowed by way of remand.

Summary

Issues involved:
The assessment order dated 19.12.2023 for the assessment period 2017-18 is challenged by the petitioner due to discrepancies in turnover calculations and tax liabilities as per GST returns.

Analysis of the judgment:

Issue 1: Discrepancy in turnover calculations
The petitioner's senior counsel argued that the assessing officer failed to exclude the purchase turnover for the period 01.04.2017 to 30.06.2017 while computing tax liability, despite correctly excluding sales turnover for the same period. The tax liability related to discrepancies in GSTR-1 and GSTR-3B returns and RCM on inward supply was dropped by the assessing officer but still appeared in the revenue abstract. This non-application of mind by the assessing officer led to patent errors in the assessment order.

Issue 2: Compliance with principles of natural justice
The respondent's counsel contended that the principles of natural justice were followed, providing the petitioner with a reasonable opportunity to present their case. It was suggested that the petitioner should pursue statutory remedies instead of seeking discretionary jurisdiction.

Conclusion:
The High Court found merit in the petitioner's argument regarding the errors in the assessment order. Consequently, the impugned assessment order was quashed, and the matter was remanded for re-consideration. The respondent was directed to afford the petitioner a reasonable opportunity, including a personal hearing, and issue a fresh assessment order within two months from the date of the court's order.

This judgment highlights the importance of correctly applying tax laws and principles in assessment orders to avoid errors and ensure procedural fairness in tax proceedings.