2024 (6) TMI 1087 - HC - GST

Violation of principles of natural justice - no reasons stated for not accepting the reply of the petitioner - interest on delayed payment of tax - inadvertent error on the part of the petitioner s accountant - HELD THAT - In Exts. P10 and P11, no reasons are stated for not accepting the reply of the petitioner. When a show cause notice is issued and a reply is submitted, the authority issuing the show cause notice shall record the reason as to why the reply is not acceptable. Exts. P10 and P11 are set aside being passed in violation of the principles of natural justice. The 1st respondent shall have a revisit of Exts. P10 and P11. The petitioner shall appear before the 1st respondent on 18.06.2024 at 11 a.m and the 1st respondent shall pass fresh orders within a period of one month therefrom. The writ petition is disposed of.

Summary

Issues:
1. Disputed demands raised by the 1st respondent based on GSTR-3B returns filed as 'NIL' due to an inadvertent error.
2. Rejection of petitioner's contentions on interest on belated payment of tax.
3. Lack of reasons for not accepting the petitioner's replies in Exts. P10 and P11.
4. Violation of principles of natural justice in the issuance of Exts. P10 and P11.

Analysis:
The petitioner, an assessee under the CGST/SGST Acts, filed GSTR-3B returns as 'NIL' for specific months due to an error by their accountant. Despite timely tax payments as per Section 39(7) of the Act, the 1st respondent raised substantial demands, including interest on alleged delayed tax payments for different periods. Following a court direction, it was revealed that the contentions of the petitioner concerning interest on belated tax payments were dismissed in Exts. P10 and P11 orders.

In Ext. P10 and Ext. P11, the reasons for not accepting the petitioner's replies were not provided, which is crucial as per the principles of natural justice. The court found this to be a violation and set aside Exts. P10 and P11. Consequently, the 1st respondent was directed to reassess the situation, and the petitioner was instructed to appear before the 1st respondent for fresh orders within a stipulated timeframe.

This judgment highlights the importance of adhering to the principles of natural justice in administrative proceedings, emphasizing the necessity for authorities to provide valid reasons for their decisions, especially when rejecting responses submitted by affected parties. The court's intervention aimed to ensure a fair and transparent process in dealing with tax-related disputes, ultimately upholding the rule of law and procedural fairness in such matters.