2024 (3) TMI 903 - HC - GST

Breach of principles of natural justice - Validity of assessment order - mismatch between the GSTR 3B returns filed by the petitioner and the auto-populated GSTR 2A returns - HELD THAT - The documents on record disclose that the liability pertains to alleged mismatch between the GSTR 3B returns of the petitioner and the auto-populated GSTR 2A returns. In recognition of difficulties faced in this regard, Circular No.183 was issued. The petitioner has also placed on record a certificate from the Chartered Accountant with regard to the reason for disparity between the above mentioned returns. Although the petitioner did not respond to the notices and participate in the assessment proceedings, the above facts and circumstances justify interference with the impugned orders, albeit by putting the petitioner on terms. The impugned assessment orders are quashed and all these matters are remanded for reconsideration subject to the condition that the petitioner remits 10% of the disputed tax demand in respect of each assessment period within a period of 15 days from the date of receipt of a copy of this order - Petition disposed off.

Summary

Issues involved: Challenge to assessment orders on the ground of breach of principles of natural justice.

The judgment by the High Court of Madras pertains to the challenge of assessment orders for five distinct assessment periods primarily on the ground of breach of principles of natural justice. The petitioner, engaged in trading automobile parts, had entrusted GST compliance to an accountant and claimed to have become aware of the assessment orders only in February 2024, following which the writ petitions were filed.

The petitioner's main contention was the mismatch between the GSTR 3B returns and auto-populated GSTR 2A returns. The petitioner argued that Circular No.183 provided a procedure for dealing with such discrepancies, including the opportunity for the taxpayer to submit a certificate from the supplier or a Chartered Accountant based on the discrepancy quantum. It was highlighted that detailed show cause notices were not issued, only a summary was provided to the petitioner.

The Government Advocate for the respondent contended that the petitioner had been given sufficient opportunity, as evidenced by the notice in Form ASMT-10 and prior intimation. It was argued that the burden lay on the taxpayer to prove entitlement to Input Tax Credit (ITC), which the petitioner allegedly failed to do.

Upon review of the documents and circumstances, the court noted the disparity between the returns and the issuance of Circular No.183 to address such issues. The petitioner had submitted a certificate from a Chartered Accountant explaining the discrepancies. Despite the petitioner's non-participation in the assessment proceedings, the court found justification to quash the assessment orders but imposed a condition for remand.

The court quashed the assessment orders and remanded the matters for reconsideration with the condition that the petitioner remits 10% of the disputed tax demand for each assessment period within 15 days. The petitioner was also allowed to respond to the show cause notice within the specified period. The assessing officer was directed to provide a reasonable opportunity to the petitioner, including a personal hearing, and issue fresh assessment orders within two months upon satisfaction of the remittance condition.

The writ petitions were disposed of with no order as to costs, and connected miscellaneous petitions were closed.