2024 (7) TMI 233 - HC - GST

Violation of principles of natural justice - reasonable opportunity was not provided to contest the tax demand on merits - petitioner is willing to remit 10% of the disputed tax demand as a condition for remand - HELD THAT - On perusal of the impugned order, it is evident that an audit was conducted and that an audit report dated 22.09.2023 was issued. It is also clear that an intimation and show cause notice preceded the impugned order. In these circumstances, the petitioner cannot be absolved of responsibility as a registered person to monitor the GST portal. At the same time, it is noticeable that the tax proposal was confirmed because the petitioner did not annex supporting documents. Therefore, albeit by putting the petitioner on terms, the interest of justice demands that the petitioner be provided an opportunity. The impugned order dated 29.12.2023 is set aside and the matter is remanded for reconsideration subject to the condition that the petitioner remits 10% of the disputed tax demand as agreed to within a maximum period of three weeks from the date of receipt of a copy of this order.

Summary

Issues:
1. Lack of reasonable opportunity to contest tax demand on merits.

Analysis:
The petitioner, engaged in wholesale textile trade, challenged an order dated 29.12.2023, alleging insufficient opportunity to contest a tax demand for the assessment period 2017-2018. The petitioner contended that they could address the defects mentioned in the order if given a chance and offered to remit 10% of the disputed tax as a condition for reconsideration.

The Government Advocate argued that an audit of the petitioner's accounts was conducted, and the show cause notice followed the audit report. It was emphasized that the petitioner, as a registered person, had a duty to monitor the GST portal. However, it was acknowledged that the tax proposal was confirmed due to the lack of supporting documents. Despite this, in the interest of justice, it was deemed necessary to provide the petitioner with an opportunity to contest the tax demand.

Consequently, the High Court set aside the impugned order and remanded the matter for reconsideration. The petitioner was directed to remit 10% of the disputed tax within three weeks and submit relevant supporting documents. Upon verification and satisfaction of the payment, the respondent was instructed to grant a reasonable opportunity for the petitioner, including a personal hearing, and issue a fresh order within two months from receiving the documents.

In conclusion, the writ petition was disposed of with no costs imposed, and connected miscellaneous petitions were closed as per the terms outlined in the judgment.