2024 (6) TMI 1086 - HC - GST

Breach of principles of natural justice - mismatches between the GSTR 3B returns of the petitioner and the auto populated GSTR 2A - SCN and impugned order were uploaded on the view additional notices and order tab of the GST portal and not communicated to the petitioner through any other mode - HELD THAT - On perusal of the impugned order, it is evident that the tax proposal pertains to mismatches between the GSTR 3B returns of the petitioner and the auto populated GSTR 2A. Such tax proposals were confirmed because the petitioner failed to reply to the show cause notice or attend the personal hearing. Upon considering the facts and circumstances, the interest of justice warrants that the petitioner be provided an opportunity to contest the tax demand on merits, albeit by putting the petitioner on terms. The impugned order dated 05.01.2024 is set aside, subject to the condition that the petitioner remits 10% of the disputed tax demand as agreed to within a maximum period of two weeks from the date of receipt of a copy of this order - Petition disposed off.

Issues involved:
Breach of principles of natural justice, satisfaction of Section 74 of applicable GST enactments, proceedings not barred by limitation, tax proposal mismatches, opportunity to contest tax demand, setting aside the impugned order, remittance of 10% disputed tax demand, submission of reply to show cause notice, fresh assessment order, contention on limitation.

Breach of principles of natural justice:
The petitioner challenged an order on the grounds of breach of natural justice, stating that the show cause notice and impugned order were only uploaded on the GST portal without direct communication. The petitioner argued that this deprived them of a reasonable opportunity as they were unaware of the notice. The court acknowledged the importance of natural justice and directed that the petitioner be given an opportunity to contest the tax demand on merits, subject to remitting 10% of the disputed tax demand.

Satisfaction of Section 74 of applicable GST enactments:
The respondent contended that the impugned order was issued under Section 74 of the GST enactments, and thus, the proceedings were not barred by limitation. The court considered this argument but set aside the order, emphasizing the need for the petitioner to have a fair chance to contest the tax demand. The court directed the respondent to provide a reasonable opportunity to the petitioner, including a personal hearing, and issue a fresh assessment order within three months upon receiving the petitioner's reply.

Tax proposal mismatches and opportunity to contest tax demand:
The impugned order highlighted tax proposal mismatches between the petitioner's GSTR 3B returns and the auto-populated GSTR 2A. These proposals were confirmed as the petitioner did not respond to the show cause notice or attend the personal hearing. However, the court, in the interest of justice, decided to allow the petitioner an opportunity to contest the tax demand on merits, with the condition of remitting 10% of the disputed tax demand.

Setting aside the impugned order and fresh assessment order:
The court ultimately set aside the impugned order dated 05.01.2024, with the condition that the petitioner remits 10% of the disputed tax demand within two weeks. The petitioner was also permitted to submit a reply to the show cause notice within this period. Upon satisfaction of the remittance and receipt of the reply, the respondent was directed to provide a reasonable opportunity to the petitioner, conduct a personal hearing, and issue a fresh assessment order within three months, leaving all contentions open to the petitioner, including the contention on limitation.

Conclusion:
The writ petition was disposed of with the mentioned terms, emphasizing the importance of natural justice, fair opportunities for contesting tax demands, and the proper procedure for assessment orders. No costs were awarded, and related motions were closed as a result of the judgment.

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