2024 (6) TMI 1310 - HC - GST

Violation of principles of natural justice - petitioner did not have a reasonable opportunity to contest the tax demand on merits - HELD THAT - On examining the impugned order, it is evident that such order relates to two e-way bills, which were not reported in the GSTR 1 statements. It is also clear that the tax proposal was confirmed because the petitioner did not reply to the show cause notice. In view of the assertion that the petitioner could not participate on account of not being aware of proceedings, the interest of justice warrants that an opportunity be provided to the petitioner, albeit by putting the petitioner on terms. The impugned orders dated 04.09.2023 and 12.04.2024 are set aside and the matter is remanded to the second respondent for re-consideration subject to the petitioner remitting an additional 5% of the disputed tax demand 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 involved:
Challenge to tax demand on grounds of lack of reasonable opportunity for contesting, rejection of appeal on limitation grounds, non-participation due to lack of awareness of proceedings, remand for reconsideration with conditions.

Analysis:

1. The petitioner challenged an order in original and an appellate order, claiming they did not have a fair opportunity to contest the tax demand. The petitioner alleged that their Accountant failed to inform them about the proceedings, leading to the filing of the writ petition.

2. During the Covid-19 pandemic, the petitioner did not conduct business and filed nil returns. Upon learning of the original order, an appeal was filed, which was rejected due to limitations. The petitioner agreed to pay 10% of the disputed tax demand during the appeal and offered an additional 5% for remand to the original authority.

3. The Additional Government Pleader confirmed that various notices were issued to the petitioner, including Form ASMT 10, a show cause notice, and a personal hearing notice. These notices indicated attempts to inform the petitioner about the proceedings.

4. The impugned order related to two e-way bills not reported in GSTR 1 statements. The tax proposal was confirmed as the petitioner did not respond to the show cause notice. Considering the petitioner's claim of non-awareness of proceedings, the court decided to provide an opportunity to the petitioner with certain conditions.

5. The court set aside the challenged orders and remanded the matter for reconsideration, requiring the petitioner to pay an additional 5% of the disputed tax demand within two weeks. The petitioner was allowed to respond to the show cause notice within this period. Upon receipt of the response and confirmation of payment, the second respondent was directed to provide a fair opportunity to the petitioner, including a personal hearing, and issue a fresh order within three months.

6. The writ petition was disposed of based on the above terms, with no costs imposed. Consequently, the related miscellaneous petition was closed as well.