2020 (12) TMI 1415 - HC - GST

Challenge to notices issued to the petitioners for recovery of differential amount of tax - demand notices issued without hearing the petitioners and the amount has been calculated unilaterally - violation of principles of natural justice - HELD THAT - The present petitions are disposed of by directing that notices issued to the petitioners which have been impugned in the present petitions directing them to deposit the differential amount of tax on account of reduction of rates after submission of bids can be responded to by the petitioners on or before January 12 2021. Whatever issues the petitioners want to raise regarding the calculation of the amount can be raised in their replies. No further time shall be granted for the purpose. They can appear before the Garrison Engineer concerned in his office on January 15 2021 at 11 00 AM. The matters shall be considered by the Garrison Engineer after hearing the petitioners and fresh demand notices shall be issued within two weeks thereafter.

Summary

Summary:The Jammu and Kashmir High Court disposed of a batch of writ petitions challenging notices issued for recovery of differential tax amounts following a reduction in tax rates post-bid submission. The contracts stipulated that the contract value included taxes as of the bid submission date (18%), with any subsequent tax rate reduction (to 12%) to be reimbursed by the contractor. The petitioners did not dispute liability but contended that the demand notices were issued without affording them an opportunity of hearing and that the tax amounts were calculated unilaterally.The Court noted the respondent's concession that the notices could be treated as show cause notices, allowing petitioners to respond. The Court directed that petitioners may file their replies by January 12, 2021, raising any issues regarding the quantum of tax demanded. A hearing before the Garrison Engineer was scheduled for January 15, 2021, after which fresh demand notices would be issued within two weeks. The Court emphasized the need for an opportunity to be heard before finalizing the differential tax recovery. The writ petitions were accordingly disposed of.