2024 (7) TMI 255 - HC - GST

Violation of principles of natural justice - petitioner did not have a reasonable opportunity to contest the tax demand on merits - petitioner was unaware of proceedings culminating in the impugned assessment - communications were uploaded on the GST portal and not communicated to the petitioner through any other mode - HELD THAT - On examining the impugned order, it is evident that the tax proposal was confirmed because the petitioner did not submit documents or reply to the show cause notice. In view of the assertion that the petitioner could not participate in proceedings on account of not being aware of the same, the interest of justice warrants reconsideration subject to putting the petitioner on terms. The impugned order dated 06.07.2023 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. The petitioner is permitted to submit a reply to the show cause notice within the aforesaid period - Petition disposed off.

Summary

Issues involved:
Challenge to tax demand due to lack of reasonable opportunity for contesting assessment order, compliance with principles of natural justice, reconsideration of impugned order based on petitioner's assertion of unawareness of proceedings.

Analysis:
The judgment concerns the challenge to a tax demand based on the petitioner's claim of not having a reasonable opportunity to contest the assessment order. The petitioner argued that all communications were uploaded on the GST portal without any other mode of communication, leading to unawareness of the proceedings culminating in the impugned order. The learned counsel for the petitioner highlighted a mismatch between the petitioner's GSTR 3B returns and the auto-populated GSTR 2A, expressing readiness to explain the disparity if given an opportunity. The petitioner agreed to remit 10% of the disputed tax demand as a condition for remand.

The Government Advocate representing respondents 1 & 2 contended that principles of natural justice were adhered to through various communications, including intimation, show cause notice, and personal hearing notices. However, upon examining the impugned order, it was found that the tax proposal was confirmed due to the petitioner's failure to submit documents or respond to the show cause notice. Given the petitioner's claim of non-participation due to unawareness, the court deemed it necessary to set aside the impugned order, subject to the condition of remitting 10% of the disputed tax demand.

As a result, the impugned order was set aside with the requirement for the petitioner to remit the agreed amount within two weeks. The petitioner was allowed to submit a reply to the show cause notice within the stipulated period. Subsequently, the 1st respondent was directed to provide a reasonable opportunity to the petitioner, including a personal hearing, and issue a fresh order within three months of receiving the petitioner's reply. The garnishee proceedings were also set aside due to the annulment of the assessment order.

The writ petition was disposed of without any costs, and connected miscellaneous petitions were closed accordingly. The judgment emphasized the importance of providing a fair opportunity for contesting tax demands and ensuring compliance with principles of natural justice in such proceedings.