2024 (6) TMI 1384 - HC - GST

Violation of principles of natural justice - petitioner did not have a reasonable opportunity to contest the tax demand on merits - inadvertent error was committed while filing the GSTR 3B returns for September 2018 - HELD THAT - On perusal of the impugned order, it is evident that tax liability was imposed with regard to reverse charge liability. The petitioner has asserted that tax liability arose on account of an inadvertent error while filing the GSTR 3B return for the month of September 2018. Such return has been placed on record. Prima facie , it appears that there is merit in the contention of the petitioner. In these circumstances, the interest of justice warrants reconsideration subject to the petitioner being put on terms. The impugned order dated 18.01.2024 is set aside subject to the 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.

Summary

Issues: Petitioner's lack of reasonable opportunity to contest tax demand, inadvertent error in filing GSTR 3B returns, compliance with principles of natural justice, reconsideration of tax liability, setting aside the impugned order subject to conditions.

Analysis:

The judgment pertains to a case where the petitioner challenged an order imposing tax liability, claiming they did not have a reasonable opportunity to contest the tax demand due to reliance on a part-time accountant for GST compliances. The petitioner argued that an inadvertent error in filing the GSTR 3B returns for September 2018 led to the tax proposal, seeking another opportunity to rectify the mistake. The petitioner agreed to remit 10% of the disputed tax demand as a condition for reconsideration.

The learned counsel for the petitioner highlighted the error in the GSTR 3B returns, emphasizing that the entire tax proposal stemmed from this mistake. The respondent, represented by the Additional Government Pleader, contended that principles of natural justice were followed, citing various notices issued to the petitioner, including a show cause notice and an offer of a personal hearing.

Upon reviewing the impugned order, the court acknowledged that the tax liability was linked to reverse charge liability and noted the petitioner's claim of inadvertent error in filing the returns. Finding merit in the petitioner's contention, the court set aside the order, subject to the condition that the petitioner remits 10% of the disputed tax demand within two weeks. The petitioner was granted the opportunity to respond to the show cause notice and file a rectified return within the specified period.

As per the judgment, once the conditions were met, the respondent was directed to provide a reasonable opportunity to the petitioner, including a personal hearing, and issue a fresh order within three months. The writ petition was disposed of without costs, with connected miscellaneous petitions closed, thereby resolving the matter in favor of the petitioner while ensuring compliance with procedural requirements and principles of natural justice.