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2024 (6) TMI 342 - HC - GSTViolation of principles of natural justice - petitioner did not have a reasonable opportunity to contest the tax demand on merits - mismatch between the GSTR 3B return and the GSTR 1 statement - HELD THAT - The tax liability pertains to mismatch between the GSTR 3B return and the GSTR 1 statement. Learned counsel for the petitioner has placed on record prima facie evidence that GST was computed at the rate of 36% in respect of certain items in January and February of the relevant assessment period. It is also clear from the impugned order that the tax proposal was confirmed because the petitioner did not respond to the show cause notice or participate in the personal hearing. In the circumstances outlined above, the interest of justice warrants that an opportunity be provided to the petitioner especially because a substantial portion of the tax demand was recovered. The impugned order dated 30.10.2023 is set aside and the matter is remanded for reconsideration by the respondent. The petitioner is permitted to submit a reply to the show cause notice dated 21.09.2023 within a period of two weeks from the date of receipt of a copy of this order - Petition disposed off by way of remand.
Issues involved: Challenge to tax demand order due to lack of reasonable opportunity for contesting the demand.
Summary: The petitioner challenged an order dated 30.10.2023, claiming they did not have a fair chance to contest the tax demand. The petitioner's part-time accountant failed to check the GST portal for uploaded notices and orders, leading to unawareness of the proceedings. The tax proposal was based on a disparity between the petitioner's GSTR 3B return and GSTR 1 statement, specifically regarding the calculation of GST at 36%. An amount of Rs. 68,677/- was debited from the petitioner's electronic credit ledger out of the disputed tax liability of Rs. 1,92,423/-. The petitioner sought an opportunity to contest the tax demand on merits. The Government Advocate pointed out that the petitioner was given sufficient opportunity to contest the tax demand through a notice in Form ASMT 10 and a show cause notice. The impugned order confirmed the tax proposal due to the petitioner's non-response to the show cause notice and absence at the personal hearing. The court acknowledged the mismatch between the GSTR 3B return and GSTR 1 statement, where GST was calculated at 36% for certain items. In the interest of justice, the court set aside the order and remanded the matter for reconsideration by the respondent. The petitioner was allowed to reply to the show cause notice within two weeks, and the respondent was directed to provide a reasonable opportunity, including a personal hearing, and issue a fresh order within three months. The amount debited from the petitioner's electronic credit ledger would be subject to the outcome of the remanded proceedings. The writ petition was disposed of without costs, and connected miscellaneous petitions were closed.
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