2024 (7) TMI 163 - HC - GST

Validity of assessmnet order - assessment periods are challenged primarily on the ground of breach of principles of natural justice - mismatch between the GSTR 3B returns filed by the petitioner and the auto-populated GSTR 2A returns - HELD THAT - The documents on record disclose that the liability pertains to alleged mismatch between the GSTR 3B returns of the petitioner and the auto-populated GSTR 2A returns. In recognition of difficulties faced in this regard, Circular No. 183 was issued. The petitioner has also placed on record a certificate from the Chartered Accountant with regard to the reason for disparity between the above mentioned returns. Although the petitioner did not respond to the notices and participate in the assessment proceedings, the above facts and circumstances justify interference with the impugned orders, albeit by putting the petitioner on terms. The impugned assessment orders are quashed and both these writ petitions are remanded for reconsideration subject to the condition that the petitioner remits 10% of the disputed tax demand in respect of each assessment period within a period of 15 days from the date of receipt of a copy of this order - Petition disposed off by way of remand.

Summary

Issues:
Challenging assessment orders on grounds of breach of natural justice.

Analysis:
The petitioner, a partnership firm engaged in stone mining, delegated GST compliance to an accountant and claimed unawareness of the assessment orders until March 2024, prompting the writ petitions. The main issue concerns the mismatch between GSTR 3B and auto-populated GSTR 2A returns. The petitioner argued lack of prior notice and referenced Circular No. 183 for procedures on such discrepancies, emphasizing the absence of a detailed show cause notice.

The Government Advocate countered, asserting that the petitioner had adequate opportunity, evidenced by Form ASMT-10 and preceding intimation notices. He emphasized the taxpayer's duty to prove entitlement to Input Tax Credit (ITC), which the petitioner allegedly failed to fulfill. Following this, the petitioner agreed to remit 10% of the disputed tax demand for each assessment period as a remand condition.

The court acknowledged the mismatch issue and Circular No. 183's relevance. Despite the petitioner's non-participation in assessment proceedings, a Chartered Accountant's certificate explaining the disparity was submitted. Consequently, the court quashed the assessment orders, remanding both petitions for reconsideration with the condition of remitting 10% of the disputed tax demand within 15 days. The petitioner could respond to the show cause notice within this period, and upon satisfaction of the remittance, the assessing officer was directed to allow a personal hearing and issue fresh assessment orders within two months, lifting the bank attachment.

In conclusion, both writ petitions were disposed of with no costs, and connected miscellaneous petitions were closed, emphasizing the importance of natural justice and procedural fairness in tax assessments.