2024 (3) TMI 579 - HC - GST

Validity of the assessment orders passed - Tax (GST) demand - No opportunity of personal hearing on request - civil contractor - registered person under applicable GST - HELD THAT - The documents on record include the petitioner's reply in July 2023. By such reply, the petitioner requested for time to respond to the show cause notice and also expressly requested for a personal hearing. Although the respondent cannot be faulted because the petitioner failed to reply on merits to the show cause notices, the assessment orders were admittedly issued without hearing the petitioner and without considering the objections or explanation of the petitioner. The entire tax demand across the relevant assessment years was recovered in this manner. Thus, at this juncture, revenue interest stands fully secured. Thus, to interfere with the impugned assessment orders so as to provide an opportunity to the petitioner to contest the tax claims. Therefore, the impugned assessment orders are quashed and these matters are remanded for re-consideration. Writ Petitions are disposed of.

Summary

Issues Involved:
The judgment involves challenges against assessment orders for distinct assessment periods issued to a civil contractor registered under GST enactments. The issues include failure to respond to show cause notices, lack of personal hearing, alleged disparity between GSTR-3B and GSTR-2A returns, appropriation of tax demand by attaching bank account, and the need for reconsideration of assessment orders.

Summary:

Failure to Respond and Lack of Hearing:
The petitioner, a civil contractor, sought time to reply to a show cause notice and requested a personal hearing. However, the assessment orders were issued without the petitioner's objections or explanation being considered, leading to the recovery of the entire tax demand without a proper hearing. The respondent failed to hear the petitioner before passing the orders, despite the petitioner's request for a personal hearing.

Disparity in Returns and Circular 183:
The tax demand across assessment years was linked to alleged differences between GSTR-3B and GSTR-2A returns. The petitioner argued that Circular 183 was not followed in this case, emphasizing the need for adherence to procedural guidelines. The petitioner's bank account was attached to recover an aggregate tax demand of Rs. 41,02,146, raising concerns about due process and fairness in the assessment.

Court Decision and Remand:
The Court intervened to provide the petitioner with an opportunity to contest the tax claims by quashing the assessment orders and remanding the matters for reconsideration. The petitioner was granted fifteen days to respond to the show cause notice and instructed to be given a reasonable opportunity, including a personal hearing, before fresh assessment orders are issued within two months. Any amounts previously appropriated would be subject to the outcome of the re-examination process.

Disposition:
The writ petitions were disposed of with no costs, and related miscellaneous petitions were closed in light of the Court's decision to remand the matters for re-consideration, emphasizing the importance of due process and the right to be heard in tax assessment proceedings.