2024 (6) TMI 951 - HC - GST

Violation of principles of natural justice - petitioner was not provided a reasonable opportunity to contest the tax demand on merits - HELD THAT - On examining the impugned orders, it is evident that the tax proposal was confirmed because the petitioner did not file written objections or attend the personal hearing. By taking into account the assertion that the petitioner could not participate in proceedings on account of being unaware of the same, the interest of justice warrants that the petitioner be provided an opportunity to contest the tax demand on merits by putting the petitioner on terms. Therefore, the impugned orders dated 10.07.2023 are set aside and the matters are remanded for reconsideration on condition that the petitioner remits 10% of the disputed tax demand in respect of each assessment period as agreed to. Such remittance shall be made within a period of 15 days from the date of receipt of a copy of this order. Petition disposed off.

Summary

Issues involved: Challenge to tax demand assessment process due to lack of opportunity for the petitioner to contest, compliance with principles of natural justice in tax assessment proceedings.

Issue 1 - Lack of Opportunity to Contest Tax Demand:
The petitioner challenged the orders in original for assessment periods 2019-2020 and 2021-2022, alleging a lack of reasonable opportunity to contest the tax demand on merits. It was argued that the petitioner, who had entrusted compliances to a consultant, was unaware of the proceedings as the show cause notice and impugned orders were only uploaded on the GST portal and not communicated through any other means. The petitioner expressed willingness to remit 10% of the disputed tax demand for each assessment period as a condition for reconsideration.

Issue 2 - Compliance with Principles of Natural Justice:
The respondent, represented by Mrs. K. Vasanthamala, contended that the impugned order was preceded by a notice in Form ASMT 10 and a show cause notice, asserting that principles of natural justice were complied with. However, upon examination of the impugned orders, it was found that the tax proposal was confirmed without the petitioner filing written objections or attending a personal hearing. Considering the petitioner's claim of unawareness leading to non-participation in the proceedings, the court held that justice required providing the petitioner with an opportunity to contest the tax demand on merits.

Judgment:
The High Court set aside the impugned orders and remanded the matters for reconsideration, with the condition that the petitioner remits 10% of the disputed tax demand for each assessment period. The petitioner was granted 15 days to make the remittance and submit a reply to the show cause notice. Upon receipt of the reply and confirmation of the remittance, the respondent was directed to provide a reasonable opportunity to the petitioner, including a personal hearing, and issue fresh orders within three months. The writ petitions were disposed of without costs, and connected miscellaneous petitions were closed.