2024 (3) TMI 1164 - HC - GST

Violation of principles of natural justice - validity of assessment order - the impugned order was issued after the petitioner failed to reply to the show cause notice or participate in proceedings in spite of being provided an opportunity to do so - attachment of bank account - HELD THAT - On examining the impugned order, it is evident that the tax liability indicated therein is a sum of Rs. 95,666/-. The petitioner has placed on record proof of payment of Rs. 96,132/- by submitting Form GST DRC-03. The impugned order also indicates that the petitioner was not heard before such order was issued. Given the fact that revenue interest is fully secured as on date, it is just and appropriate that the petitioner be provided an opportunity of being heard. The impugned order dated 12.09.2023 is quashed and the matter is remanded for reconsideration. The petitioner is permitted to file a reply to the show cause notice within a period of two weeks from the date of receipt of a copy of this order. Upon receipt thereof, the respondent is directed to provide a reasonable opportunity to the petitioner, including a personal hearing, and thereafter issue a fresh assessment order within a period of two months from the date of receipt of the petitioner's reply. As a consequence of the impugned assessment order being quashed, the bank attachment order shall stand raised. The writ petition is allowed.

Summary

Issues Involved:
The judgment involves the breach of principles of natural justice in an assessment order dated 12.09.2023.

Details of the Judgment:

1. The petitioner, engaged in the business of purchasing and selling textile fabrics, challenged the assessment order on the ground of breach of natural justice. The petitioner claimed unawareness of the show cause notice and the impugned order due to them being uploaded in the 'View Additional Notices' tab on the GST portal. Upon discovering the order and the attachment of their bank account, the petitioner filed a writ petition.

2. The petitioner's counsel argued that the demand in the impugned order arose from a disparity between the petitioner's GSTR 3B returns and the GSTR-1 statement of their supplier. It was highlighted that the disparity was rectified while filing the annual return in GSTR-9 by paying a total sum exceeding the tax liability under the impugned order.

3. The learned Additional Government Pleader representing the respondent contended that the impugned order was issued after the petitioner failed to respond to the show cause notice or engage in the proceedings despite being given an opportunity to do so.

4. Upon examination, it was found that the tax liability in the impugned order was Rs. 95,666/-. The petitioner provided proof of payment of Rs. 96,132/- by submitting Form GST DRC-03. It was noted that the petitioner was not heard before the issuance of the order. Given the secure revenue interest, it was deemed just and appropriate to grant the petitioner a hearing opportunity.

5. Consequently, the impugned order dated 12.09.2023 was quashed, and the matter was remanded for reconsideration. The petitioner was allowed to respond to the show cause notice within two weeks and the respondent was directed to provide a reasonable opportunity, including a personal hearing, before issuing a fresh assessment order within two months.

6. The quashing of the assessment order led to the lifting of the bank attachment order. The writ petition was allowed with no costs imposed, and the connected miscellaneous petitions were closed.