2024 (6) TMI 1255 - HC - GST

Violation of principles of natural justice - petitioner failed to reply to rest of the notices that preceded the impugned order - discrepancies between the amount of the credit reflected in Form GSTR 2A - HELD THAT - Considering the fact that the petitioner appears to be a small time dealer and considering the fact that the petitioner is willing to deposit 25% of the disputed tax, as a condition, for the case to be heard again, this Court is inclined to grant partial relief to the petitioner by quashing the impugned order and remitting back the case to the respondent to pass fresh orders on merits and in accordance with law within a period of two months from the date of receipt of a copy of this order, subject to the petitioner depositing 30% of the disputed tax within a period of 30 days from the date of receipt of a copy of this order from its Electronic Cash Register and subject to filing reply to the show cause notices that preceded the impugned order. Petition disposed off by way of remand.

Summary

Issues:
1. Challenge to impugned order dated 21.09.2023 for the assessment year 2017-18.
2. Failure to reply to notices preceding the impugned order.
3. Discrepancies in Input Tax Credit between Form GSTR 2A and Form GSTR 3B.
4. Request for opportunity to explain the case and willingness to deposit disputed tax.
5. Argument of negligence by the petitioner in not participating in the process.
6. Application of legal precedents regarding dismissal based on latches and limitation.
7. Granting partial relief by quashing the impugned order and remitting the case back for fresh orders.

Analysis:
The petitioner challenged the impugned order dated 21.09.2023 related to the assessment year 2017-18, citing discrepancies in the Input Tax Credit between Form GSTR 2A and Form GSTR 3B. The petitioner admitted to failing to reply to notices preceding the impugned order but asserted having sufficient records to support the correct availing of Input Tax Credit. The petitioner, described as a small-time dealer, requested an opportunity to explain the case and expressed willingness to deposit 25% of the disputed tax. On the other hand, the respondent argued negligence on the petitioner's part for not responding to notices or participating in the process, invoking legal precedents to support dismissal based on latches and limitation.

The Court considered the submissions from both sides and noted the petitioner's willingness to deposit 25% of the disputed tax. Acknowledging the petitioner's status as a small-time dealer, the Court granted partial relief by quashing the impugned order and remitting the case back to the respondent for fresh orders within two months. The petitioner was directed to deposit 30% of the disputed tax within 30 days and file a reply to the show cause notices preceding the impugned order. The quashed order was to be treated as an addendum to the show cause notice, emphasizing the petitioner's right to be heard before the new orders are passed. The Writ Petition was disposed of with the outlined directions, with no costs incurred, and connected miscellaneous petitions were closed.