2024 (5) TMI 260 - HC - GST

Challenge to assessment order and bank attachment notice - assail on the ground that the petitioner did not have a reasonable opportunity to contest the tax demand on merits - mismatch between the GSTR 1 and GSTR 3B - violation of principles of natural justice - HELD THAT - The orders impugned herein reveal that tax liability was imposed on the basis of a mismatch between the GSTR 1 and GSTR 3B. These orders were issued without the petitioner being heard. In these circumstances, albeit by putting the petitioner on terms, it is just and appropriate that the petitioner be provided a reasonable opportunity to contest the tax demand. Therefore, the impugned assessment order and the consequential attachment notice are set aside and the matter is remanded for reconsideration subject to the condition that the petitioner remits 10% of the disputed tax demand as agreed to within a period of two weeks from the date of receipt of a copy of this order. Within the aforesaid period, the petitioner is also permitted to submit a reply to the show cause notice. Petition disposed off by way of remand.

Summary

Issues involved: Challenge to assessment order and bank attachment notice on grounds of lack of reasonable opportunity to contest tax demand.

Assessment Order Challenge:
The petitioner contended that they were unaware of the assessment proceedings and orders due to notifications being uploaded on the GST portal without their knowledge. It was argued that this lack of awareness deprived them of the opportunity to contest the tax demand on merits. The petitioner expressed willingness to remit 10% of the disputed tax demand as a condition for reconsideration.

Response of Government Advocate:
The Government Advocate representing respondents 1 & 2 argued that the petitioner had been provided with sufficient opportunity to contest the tax demand through the issuance of an intimation and a show cause notice. However, it was noted that the tax liability was imposed without the petitioner being heard, based on a mismatch between GSTR 1 and GSTR 3B. In light of this, it was deemed just and appropriate to afford the petitioner a reasonable opportunity to contest the tax demand.

Judgment and Remand:
The High Court set aside the assessment order and the bank attachment notice, remanding the matter for reconsideration. The petitioner was directed to remit 10% of the disputed tax demand within two weeks and submit a reply to the show cause notice within the same period. Upon receipt of the reply and confirmation of the remittance, the assessing officer was instructed to provide the petitioner with a reasonable opportunity, including a personal hearing, and issue a fresh order within two months. The bank attachment was lifted due to the assessment order being set aside. The writ petitions were disposed of without costs, and connected miscellaneous petitions were closed.