2024 (6) TMI 1257 - HC - GST

Violation of principles of natural justice - petitioner did not have a reasonable opportunity to contest the tax demand on merits - SCN and impugned order were uploaded in the portal and not communicated to the petitioner through any other mode - mismatch between the petitioner's GSTR 3B return and the auto-populated GSTR 2A - HELD THAT - On examining the impugned order, it is evident that the tax proposal related to a mismatch between the petitioner's GSTR 3B return and the auto-populated GSTR 2A. It is also clear that such proposal was confirmed because the tax payer did not file objections or avail of personal hearing opportunity. By taking into account the assertion that the petitioner could not participate in proceedings on account of being unaware of the same, the interest of justice warrants that the petitioner be provided an opportunity to contest the tax demand on merits by putting the petitioner on terms. The impugned order dated 12.12.2023 is set aside on condition that the petitioner remits 10% of the disputed tax demand as agreed to within a period of two weeks from the date of receipt of a copy of this order - petition disposed off by way of remand.

Summary

Issues:
Challenge to tax demand due to lack of reasonable opportunity for contesting, Compliance with principles of natural justice, Mismatch between GSTR 3B return and GSTR 2A, Remittance of 10% disputed tax demand, Setting aside the impugned order, Providing opportunity for contesting tax demand, Fresh order issuance within three months.

Analysis:
The judgment addresses the issue raised by the petitioner regarding the lack of a reasonable opportunity to contest the tax demand on merits. The petitioner claimed unawareness of proceedings as the show cause notice and impugned order were uploaded on a portal without direct communication. The court acknowledged this claim and set aside the impugned order, emphasizing the importance of providing an opportunity for the petitioner to contest the tax demand on merits.

Regarding the mismatch between the petitioner's GSTR 3B return and auto-populated GSTR 2A, the court noted that the tax proposal was confirmed due to the petitioner's failure to file objections or avail of a personal hearing opportunity. The petitioner expressed willingness to remit 10% of the disputed tax demand as a condition for remand, which was accepted by the court. This condition was set for the petitioner to have a chance to contest the tax demand on merits.

The judgment also highlighted the compliance with principles of natural justice by the respondent, who issued intimation, show cause notice, and a personal hearing notice. Despite this, the court found it necessary to provide the petitioner with a fresh opportunity to contest the tax demand, ensuring fairness and adherence to procedural requirements.

In conclusion, the impugned order was set aside with the condition of remitting 10% of the disputed tax demand. The petitioner was granted the opportunity to submit a reply to the show cause notice within a specified period. Upon satisfaction of the remittance and receipt of the petitioner's reply, the respondent was directed to provide a reasonable opportunity, including a personal hearing, and issue a fresh order within three months. The writ petition was disposed of without costs, bringing closure to the connected miscellaneous petitions.