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2024 (4) TMI 1057 - HC - GSTBreach of principles of natural justice - non application of mind - Calculation of Tax Liability based on subsequent year's Balance Sheet - non-service of SCN - petitioner did not reply to the show cause notice because the notice was uploaded on the View Additional Notices and Orders tab on the GST portal and not communicated to the petitioner through any other mode - HELD THAT - The justification of the petitioner for not responding to the show cause notice is not convincing in as much as the petitioner is under an obligation to monitor the GST portal on an ongoing basis as a registered person. Therefore, it is also necessary to put the petitioner on terms. On instructions, learned counsel for the petitioner submits that the petitioner agrees to remit a sum of Rs. 10,00,000/- as a condition for remand. The impugned order dated 29.12.2023 is set aside on condition that the petitioner remits a sum of Rs. 10,00,000/- (Rupees Ten lakhs only) towards the disputed tax demand as agreed to within a period of three weeks from the date of receipt of a copy of this order. The petitioner is permitted to submit a reply to the show cause notice within the aforesaid period. The writ petition is disposed off.
Issues involved: Challenge to an order based on breach of natural justice and non-application of mind.
Summary: The petitioner challenged an order dated 29.12.2023 on grounds of breach of natural justice and non-application of mind. The proceedings were initiated after an inspection at the petitioner's registered place of business. The petitioner did not respond to the show cause notice as it was uploaded on the GST portal without direct communication. The impugned order imposed tax liability based on the wrong financial statements, leading to an incorrect taxable turnover. The petitioner argued that the order showed a lack of proper consideration. The Government Advocate pointed out that the petitioner admitted liability for some issues but did not respond to the show cause notice. The balance sheets for 31.03.2018 and 31.03.2019 showed different amounts payable to creditors. The court noted that the respondent should have considered the 2018 financial statement for assessment instead of the 2019 statement. The petitioner's reason for not responding promptly was deemed insufficient, emphasizing the obligation to monitor the GST portal regularly. Upon agreement from the petitioner, the court set aside the impugned order on the condition that the petitioner remits Rs. 10,00,000 towards the disputed tax demand within three weeks. The petitioner was allowed to submit a reply to the show cause notice within this period. Once the payment and reply were received, the respondent was directed to provide a fair opportunity for the petitioner, including a personal hearing, and issue a fresh order within three months. The writ petition was disposed of without costs, and connected miscellaneous petitions were closed.
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