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2024 (2) TMI 1291 - HC - GSTViolation of principles of natural justice - Non-service of SCN - petitioner became aware of the intimation, show cause notice and impugned order, upon examining the GST portal - HELD THAT - Solely with a view to provide an opportunity to the petitioner to establish the genuineness of the transaction and consequently the genuineness of the ITC claim, the impugned order calls for interference. At the same time, it should be noticed that such impugned order was issued on 31.05.2023 and the petitioner has approached this Court belatedly. It should also be noticed that it appears prima facie that the ingredients of Section 74 were satisfied. In order to safeguard the interest of revenue in the facts and circumstances, the petitioner shall remit 10% of the disputed tax demand as a condition for remand. The petitioner, through counsel, also agrees to this condition. The impugned assessment order is quashed and the matter is remanded for reconsideration subject to the condition that the petitioner remits 10% of the disputed tax demand within a maximum period of two weeks from the date of receipt of a copy of this order. The petitioner is also permitted to issue a reply to the show cause notice within a maximum period of two weeks from the date of remittance. Petition disposed off.
Issues involved: Challenge to assessment order under Section 74 of State Goods and Services Tax Act, 2017 without satisfying the provisions, lack of opportunity for the petitioner to establish genuineness of transaction and Input Tax Credit (ITC) claim, delay in approaching the Court, remittance of 10% disputed tax demand as a condition for remand.
Challenge to Assessment Order under Section 74: The petitioner, a registered person under GST laws, challenged the assessment order invoking Section 74 of the State Goods and Services Tax Act, 2017, claiming that the ingredients of the provision were not satisfied. The petitioner asserted that the relevant goods were purchased in 2020, but ITC was reversed in 2021 due to the supplier's alleged non-existence. The Additional Government Pleader argued that the ITC was claimed fraudulently to evade tax, justifying the invocation of Section 74. The Court noted the obligation on the registered person to prove the genuineness of transactions for ITC claims. Lack of Opportunity for Petitioner: The petitioner contended that he was unaware of the assessment order until informed by HDFC Bank, indicating a lack of notice and opportunity to be heard. The Court observed that while the petitioner was put on notice, he was not given a chance to present his case before the assessment order was issued. Recognizing the need for the petitioner to establish the genuineness of the transaction, the Court deemed the order for remittance of 10% disputed tax demand as a condition for remand necessary to safeguard revenue interests. Delay in Approaching the Court: Although the impugned order was issued on 31.05.2023, the petitioner approached the Court belatedly. Despite the delay, the Court found it necessary to provide an opportunity for the petitioner to establish the genuineness of the transaction and ITC claim. The Court emphasized the satisfaction of Section 74 requirements and directed the petitioner to remit 10% of the disputed tax demand within two weeks as a condition for remand. Remittance of 10% Disputed Tax Demand: In the interest of revenue and to allow the petitioner to prove the genuineness of the transaction, the Court quashed the assessment order and remanded the matter for reconsideration. The petitioner agreed to remit 10% of the disputed tax demand as a condition for the remand. The Court directed the assessing officer to provide a reasonable opportunity for the petitioner to respond to the show cause notice and issue a fresh assessment order within two months after receiving the remittance. Conclusion: The Court disposed of the writ petition, setting conditions for remand and reconsideration of the assessment order. The petitioner was granted the opportunity to establish the genuineness of the transaction and ITC claim, subject to remitting 10% of the disputed tax demand within a specified period. No costs were awarded, and connected miscellaneous petitions were closed as a result of the judgment.
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