2024 (6) TMI 892 - HC - GST

Validity of Assessment orders under Section 63 of the Central Goods and Services Tax Act, 2017 - cancellation of GST registration of petitioner on the ground that the petitioner had not filed his returns continuously for a period of six months - HELD THAT - On examining the orders impugned herein, it is evident that the tax liability was computed on best judgment basis by drawing on the particulars available in the auto - populated GSTR-2A. By using the total purchase value as the basis, the taxable value was arrived at and freight and miscellaneous charges and gross profit was added thereon. This exercise was carried out without hearing the petitioner in person and considering the petitioner's objections. In these facts and circumstances, it is just and necessary that the petitioner be provided an opportunity to contest the tax proposal on merits. Since the petitioner has remitted 10% of the disputed tax demand under the old registration, it is open to the petitioner to apply for refund of the same. If such application is made, the same should be considered and disposed of within a period of 30 days. In order to secure revenue interest in the meantime, as agreed to by the petitioner, the petitioner shall remit 10% of the disputed tax demand in respect of each assessment period. These matters are remanded for reconsideration.

Summary

Issues Involved:
Assessment orders u/s 63 of CGST Act challenged due to cancellation of GST registration and failure to file returns.

Summary:
The writ petitions challenge assessment orders under Section 63 of the Central Goods and Services Tax Act, 2017, following the cancellation of the petitioner's GST registration due to non-filing of returns. The petitioner claimed unawareness of the notice and show cause notice due to their upload using a temporary ID. The petitioner argued that the show cause notice in Form GST ASMT-14 is mandatory under Section 63 and Rule 100 of TNGST Rules, and that uploading on a temporary ID does not constitute proper service. Despite remitting 10% of the disputed tax demand and attempting to file appeals, the petitioner faced difficulties due to the temporary ID creation.

In response, the learned Additional Government Pleader argued that the petitioner had access to the temporary ID as the relevant password was communicated to the petitioner's email ID and mobile number linked to the original GST registration. The tax liability was determined based on best judgment using GSTR-2A data without hearing the petitioner or considering objections.

The Court found it necessary to grant the petitioner an opportunity to contest the tax proposal on merits and instructed the petitioner to apply for a refund of the remitted amount. The petitioner was directed to remit 10% of the disputed tax demand for each assessment period within two weeks, irrespective of the remand application's outcome. The impugned orders were set aside, and the matters were remanded for reconsideration, allowing the petitioner to reply to the show cause notice and ensuring a personal hearing. The first respondent was directed to issue fresh orders within three months of receiving the petitioner's reply. The writ petitions were disposed of without costs, and connected miscellaneous petitions were closed.