2024 (3) TMI 339 - HC - GST

Validity of assessment order - alleged mismatch between the GSTR-3B and GSTR-1 return and the alleged mismatch between the GSTR-3B and GSTR-7 returns - inadvertent error in categorizing the nature of transaction in the returns - opportunity of hearing not provided to petitioner - violation of principles of natural justice - HELD THAT - The documents on record clearly indicate that the petitioner was negligent in not contesting the tax demand. However, it is equally clear that the impugned assessment order was issued without hearing the petitioner and, consequently, without considering the petitioner's explanation and any documents in support thereof. In these circumstances, albeit by putting the petitioner on terms, the petitioner should be provided an opportunity to contest the tax demand. The impugned assessment order is quashed subject to the condition that the petitioner remits 10% of the disputed tax demand as a condition for remand. The petitioner is also submitted to file a reply to the show cause notice within a maximum period of two weeks from the date of receipt of a copy of this order along with 10% of the disputed tax demand. Subject to receipt of the aforesaid, the assessing officer is directed to provide a reasonable opportunity, including a personal hearing, and issue a fresh assessment order in accordance with law within a maximum period of two months thereafter. Petition disposed off.

Summary

Issues involved: Challenge to assessment order based on lack of awareness of proceedings and alleged mismatch in GST returns.

Challenge based on lack of awareness of proceedings:
The petitioner engaged a consultant for GST compliance who failed to inform about the assessment order. The petitioner was unaware of the intimation or show cause notice preceding the assessment order which was uploaded on the GST portal. The petitioner filed a writ petition claiming lack of awareness.

Alleged mismatch in GST returns:
The tax demand was based on a mismatch between GSTR-3B and GSTR-1 return, as well as GSTR-3B and GSTR-7 returns due to an inadvertent error in categorizing transactions. The petitioner was ready to remit 10% of the disputed tax demand for remand.

Court's Decision:
The assessment order was quashed as it was issued without hearing the petitioner and considering explanations or supporting documents. The petitioner was directed to remit 10% of the disputed tax demand for remand and file a reply to the show cause notice within two weeks. The assessing officer was instructed to provide a reasonable opportunity, including a personal hearing, and issue a fresh assessment order within two months. The case was disposed of with no costs incurred.