2024 (6) TMI 1083 - HC - GST

Challenge to assessment order and attachment order - mismatch between the petitioner's GSTR 3B returns and the auto-populated GSTR 2A - SCN and impugned order were uploaded on the View Additional Notices and Orders tab on the GST portal, but not communicated to the petitioner through any other mode - Violation of principles of natural justice - HELD THAT - On perusal of the impugned assessment order, it is evident that the tax proposal pertained to the mismatch between the petitioner's GSTR 3B returns and the auto-populated GSTR 2A. It is also clear that the tax proposal was confirmed because the petitioner failed to reply to the show cause notice. In these circumstances, albeit by putting the petitioner on terms, the interest of justice warrants that an opportunity be provided to the petitioner to contest the tax demand on merits. The impugned assessment order dated 17.11.2023 is set aside 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 two weeks from the date of receipt of a copy of this order. Petition disposed off.

Summary

Issues:
Challenge to assessment order and consequential attachment order due to lack of communication and mismatch in tax returns.

Analysis:
The petitioner challenged the assessment order and attachment order, claiming unawareness of the proceedings leading to the impugned assessment due to lack of communication through any other mode besides the GST portal. The tax proposal was based on a mismatch between the petitioner's GSTR 3B returns and auto-populated GSTR 2A. The petitioner expressed readiness to prove the eligibility for Input Tax Credit and agreed to remit 10% of the disputed tax demand for reconsideration.

The Government Advocate representing the respondents argued that the petitioner was served with a recovery notice after the assessment order was issued, indicating awareness of the proceedings. It was highlighted that a show cause notice was issued, and ample opportunity was provided to the petitioner before the impugned order.

Upon reviewing the assessment order, it was found that the tax proposal was confirmed due to the petitioner's failure to respond to the show cause notice regarding the mismatch in tax returns. Despite placing the petitioner on terms, the court deemed it necessary in the interest of justice to provide an opportunity for the petitioner to contest the tax demand on its merits.

Consequently, the impugned assessment order was set aside, and the matter was remanded for reconsideration with the condition of remitting 10% of the disputed tax demand within two weeks. The petitioner was granted the opportunity to reply to the show cause notice, and upon satisfaction of the remittance, the first respondent was directed to provide a reasonable opportunity for a personal hearing and issue a fresh order within three months. The bank attachment was lifted as a consequence of setting aside the assessment order.

The writ petitions were disposed of without costs, and connected miscellaneous petitions were closed accordingly.