2024 (4) TMI 25 - HC - GST

Validity of Demand of GST - No personal hearing as required under Section 75(5) - Bank account has been frozen - discrepancies between GSTR-3B and GSTR-7 and mismatch between GSTR-3B and GSTR-7 - ASMT-10 order passed - intimation issued u/s 73 - HELD THAT - Opportunity of hearing is a basic requirement before passing any adverse order. In the present case, admittedly, the petitioner has not availed that opportunity of personal hearing provided through portal. Since the petitioner has made out a prima facie case, this Court is inclined to entertain this Writ Petition and grant an order of interim stay. The learned Additional Government Pleader submits that instead of granting an interim order, the petitioner can be provided one more opportunity and the date can be fixed by this Court. For the sole purpose to provide an opportunity of personal hearing to the petitioner, this Court is inclined to set aside the impugned order. Accordingly, the same is set aside. The petitioner, without expecting any further notice from the 1st respondent, shall appear before the 1st respondent on 27.03.2024 and shall provide his explanation, if any. The 1st respondent shall consider the same and pass a fresh order. In fine, this Writ Petition is allowed.

Summary

Issues involved:
The issues involved in the judgment are regarding the initiation of proceedings against a registered tax payer by the 1st respondent due to discrepancies between GSTR-3B and GSTR-2A, GSTR-3B and GSTR-7, resulting in the attachment of the petitioner's property and freezing of the bank account.

Details of the Judgment:

Issue 1: Communication of Notices through Portal
The petitioner, a registered tax payer, contended that the Show Cause Notice and other proceedings were communicated only through the portal, causing him to miss participating in the enquiry. The Court noted that while Section 169(D) allows notices through the portal, many traders may not be equipped to follow such notices and suggested alternative modes of service as prescribed under Section 169 of the Act.

Issue 2: Lack of Participation and Ignorance
The petitioner's counsel argued that the petitioner failed to participate in the proceedings due to ignorance in following the notices through the portal. The Additional Government Pleader for the 1st respondent stated that ample opportunities were provided, including a Show Cause Notice, personal hearing, and an appeal remedy, which the petitioner did not avail in time.

Issue 3: Judicial Precedent and Right to Revive Registration
Citing the case of Suguna Cutpiece v. Appellate Deputy Commissioner, the Court emphasized the importance of allowing assesses to integrate back into the GST regime to conduct legitimate business. The judgment highlighted the need to facilitate the return of petitioners to the GST fold, subject to certain conditions and safeguards, to ensure compliance with tax obligations.

Conclusion:
In light of the above issues, the Court set aside the impugned order to provide the petitioner with an opportunity for a personal hearing. The petitioner was directed to appear before the 1st respondent to provide an explanation, and the Court allowed the Writ Petition, emphasizing the importance of granting procedural fairness and opportunities for compliance in tax matters.