2024 (6) TMI 1256 - HC - GST

Violation of principles of natural justice - petitioner did not have a reasonable opportunity to contest the tax demand on merits - petitioner was not aware of proceedings, and could not participate in the same - HELD THAT - On examining the impugned order, it is evident that the tax proposal was confirmed because the tax prayer did not respond to the show cause notice by filing objections. The impugned order indicates that the personal hearing notice dated 10.03.2023, reminder dated 29.05.2023 were sent by RPAD and that the latter was received by the petitioner on 01.06.2023. In these circumstances, the explanation of the petitioner that he was unaware on account of notices being uploaded on the GST portal cannot be accepted. At the same time, it is apparent that the tax proposal was confirmed without the petitioner being heard and liability was imposed under Section 74 of applicable GST enactments. The impugned order dated 30.10.2023 is set aside on condition that the petitioner remits that 15% of the disputed tax demand within fifteen days from the date of receipt of a copy of this order. Within the said period, the petitioner is directed to submit a reply to the show cause notice - Petition disposed off.

Summary

Issues:
Challenge to tax demand due to lack of reasonable opportunity for contesting assessment order.

Analysis:
The writ petition challenges an order in original dated 30.10.2023 on the grounds that the petitioner was not provided with a reasonable opportunity to contest the tax demand on its merits. The petitioner claims that the show cause notice and related communications were uploaded on the GST portal but not communicated through any other means, leading to their unawareness of the proceedings and inability to participate. The tax proposal concerns a mismatch between the petitioner's GSTR-3B returns and the GSTR-7 return filed by the recipient of construction services, with the petitioner recording transactions in a different assessment period than the recipient.

The Additional Government Pleader and the senior standing counsel representing the respondents argue that reminders were sent to the petitioner via RPAD, which were received on 01.06.2023. They also point out that when the recipient of services files Form GSTR-7, the petitioner should have received credit in their electronic cash ledger, making the petitioner's contention of being unaware untenable. The impugned order confirms the tax proposal due to the petitioner's failure to respond to the show cause notice by filing objections. However, it is noted that the tax proposal was confirmed without the petitioner being heard, and liability was imposed under Section 74 of the applicable GST enactments. To ensure justice, the court sets aside the impugned order on the condition that the petitioner remits 15% of the disputed tax demand within fifteen days and submits a reply to the show cause notice. Once the reply is received and the remittance confirmed, the first respondent is directed to provide a reasonable opportunity to the petitioner, including a personal hearing, and issue a fresh order within three months.

In conclusion, the writ petition is disposed of with the above terms without any order as to costs, and the connected miscellaneous petitions are closed.