2024 (5) TMI 1034 - HC - GST

Challenge to tax demand - lack of reasonable opportunity for contesting the order - Violation of principles of natural justice - HELD THAT - The petitioner has placed on record the bank statement. Such statement discloses that a sum of Rs. 3,09,574/- was appropriated from the petitioner's bank account. This amount appears to correspond to the entire demand towards tax, interest and penalty. Consequently, at this juncture, revenue interest is fully secured. Since the petitioner asserts that he is in a position to explain the discrepancy between his GSTR 3B returns and the auto populated GSTR 2B, it is just and appropriate that an opportunity be provided to the petitioner. The impugned order dated 01.09.2023 is set aside and the matter is remanded for reconsideration - petition disposed off by way of remand.

Summary

Issues involved: Challenge to tax demand due to lack of reasonable opportunity for contesting the order.

Summary:

Issue 1: Lack of Reasonable Opportunity for Contesting Tax Demand
The petitioner challenged an order dated 10.09.2023, claiming they were unaware of the proceedings leading to the order as notices were only uploaded on the portal and not communicated through other means. The petitioner discovered the order upon receiving communication about the attachment of their bank account. The petitioner, supported by bank statements, argued that a sum covering tax, interest, and penalty was deducted from their account, related to a discrepancy between their GSTR 3B and auto-populated GSTR 2B returns. The respondent contended that the petitioner had sufficient opportunity to contest the tax demand, with a show cause notice and reminders issued. The court noted the amount deducted from the petitioner's account matched the tax demand, ensuring revenue interest, and decided to set aside the impugned order and remand the matter for reconsideration. The petitioner was granted two weeks to respond to the show cause notice, and the respondent was directed to provide a reasonable opportunity, including a personal hearing, before issuing a fresh order within three months. The attachment on the petitioner's bank account was lifted pending the outcome of the proceedings.

Conclusion:
The High Court of Madras set aside the impugned order, remanded the matter for reconsideration, and directed the respondent to provide the petitioner with a reasonable opportunity to contest the tax demand. The petitioner was granted time to respond to the show cause notice, and the attachment on their bank account was lifted.