2024 (5) TMI 306 - HC - GST

Violation of principles of natural justice - cancellation of GST registration of petitioner - mismatch between the petitioner's GSTR 1 and GSTR 3B returns - HELD THAT - On perusal of the impugned order, it appears that the tax liability pertains to a mismatch between the petitioner's GSTR 1 and GSTR 3B returns. Since the petitioner's GST registration was cancelled, at a minimum, the petitioner has little reason to continually monitor the GST portal. The petitioner submits that the petitioner agrees to remit 10% of the disputed tax demand as a condition for remand. The principles of natural justice demand that the petitioner be provided an opportunity to contest the tax demand. Therefore, the impugned order is quashed 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 maximum period of two weeks from the date of receipt of a copy of this order. The Writ Petition is disposed off.

Summary

Issues involved:
The judgment deals with the breach of principles of natural justice in an order dated 20.10.2023 related to the cancellation of GST registration and a tax demand notice received by the petitioner.

Cancellation of GST registration:
The petitioner's GST registration was cancelled on 27.02.2019, and the petitioner claimed to be unaware of the proceedings leading to the impugned order due to no longer being a registered person. The petitioner received a demand notice dated 11.01.2024 by post, prompting the filing of the present writ petition.

Principles of natural justice:
The petitioner argued that the order of cancellation was issued without giving him a chance to contest, as he had no reason to monitor the GST portal after registration cancellation. The court acknowledged the importance of natural justice and ruled in favor of providing the petitioner with an opportunity to contest the tax demand.

Tax liability and remand:
The tax liability mentioned in the impugned order was related to a mismatch between the petitioner's GSTR 1 and GSTR 3B returns. The petitioner agreed to remit 10% of the disputed tax demand as a condition for remand, which was accepted by the court.

Court's decision:
The court quashed the impugned order and remanded the matter for reconsideration, with the condition that the petitioner remits 10% of the disputed tax demand within two weeks. The petitioner was allowed to submit a reply to the show cause notice within the same period. The respondent was directed to provide a reasonable opportunity to the petitioner, including a personal hearing, and issue a fresh order within two months from the receipt of the petitioner's reply.

Disposition:
The Writ Petition was disposed of with no order as to costs, and connected miscellaneous petitions were closed as a result of the judgment.