2024 (5) TMI 175 - HC - GST

Breach of principles of natural justice - Petition was unaware of proceedings culminating in the impugned assessment order on account of the fact that GST compliances had been entrusted to a consultant, who had not informed the petitioner of such proceeding - discrepancy between the petitioner's GSTR-3B and auto-populated GSTR-2A - HELD THAT - On perusal of the impugned order, it is evident that such order relates to the discrepancy between the GSTR 3B and GSTR 2A returns. The petitioner has placed on record several documents to establish that the petitioner was entitled to avail of ITC. Since the petitioner was not heard before the impugned order was issued, principles of natural justice warrant interference so as to provide an opportunity to the petitioner. It should be noticed that the petitioner remitted 10% of the disputed tax demand, before filing this writ petition. Therefore, the impugned order dated 03.03.2023 is set aside and the matter is remanded for reconsideration. The petitioner is also permitted to file a reply to the show cause notice within 15 days from the date of receipt of a copy of this order - Petition disposed off.

Summary

Issues involved: Challenge to order on breach of principles of natural justice

The petitioner challenged an order dated 03.05.2023 on the grounds of breach of principles of natural justice. The petitioner claimed unawareness of the proceedings leading to the impugned assessment order as GST compliances were handled by a consultant who did not inform the petitioner. The tax demand in question pertained to a discrepancy between the petitioner's GSTR-3B and auto-populated GSTR-2A. The petitioner sought an opportunity to establish the proper availment of Input Tax Credit (ITC) and submitted additional documents to prove the genuineness of purchases.

Court's Decision and Reasoning:

Upon review, the Court found that the impugned order related to the discrepancy between the GSTR 3B and GSTR-2A returns. The petitioner had provided documents to support the claim of being entitled to ITC. As the petitioner was not heard before the issuance of the order, the Court decided to set aside the order dated 03.03.2023 and remand the matter for reconsideration. The petitioner was granted 15 days to file a reply to the show cause notice, and the respondent was directed to provide a reasonable opportunity to the petitioner, including a personal hearing. A fresh order was to be issued within two months from the receipt of the petitioner's reply.

The Court emphasized the importance of principles of natural justice and noted that the petitioner had already remitted 10% of the disputed tax demand before filing the writ petition. The case was disposed of without any order as to costs, and the connected miscellaneous petitions were closed accordingly.