2024 (7) TMI 256 - 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 order - communications were uploaded on the GST portal and not communicated to the petitioner through any other mode - HELD THAT - On perusal of the show cause notice, it appears that the tax proposal relates to a mismatch between the petitioner's GSTR 3B return and the GSTR 1 return as also between the petitioner's GSTR 3B return and the auto-populated GSTR 2A. Such proposal was confirmed without the petitioner being heard. The petitioner asserts that it was unable to participate in proceedings on account of not being aware of the same. In these circumstances, the interest of justice warrants that the petitioner be provided an opportunity to contest the tax demand on merits by putting the petitioner on terms. The impugned order dated 30.12.2023 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:
1. Lack of reasonable opportunity to contest tax demand.
2. Compliance with principles of natural justice.
3. Mismatch in GSTR returns and auto-populated data.
4. Setting aside the impugned order and providing an opportunity to contest the tax demand.

Analysis:

1. The petitioner challenged an order dated 30.12.2023, claiming they were not given a fair chance to contest the tax demand. They argued that they were unaware of the proceedings leading to the assessment order as all communications were done through the GST portal without direct communication. The petitioner only became aware of the situation upon receiving a bank attachment notice on 15.04.2024. They contended that the impugned order lacked reasons and no personal hearing was granted.

2. The petitioner's counsel highlighted the lack of reasons in the impugned order and the absence of a personal hearing. On the other hand, the Government Advocate for the 1st respondent argued that the principles of natural justice were upheld by issuing a show cause notice on 29.09.2023 and offering a personal hearing to the petitioner.

3. Upon reviewing the show cause notice, it was evident that the tax proposal was based on discrepancies between the petitioner's GSTR returns and auto-populated data. The assessment was confirmed without giving the petitioner an opportunity to be heard. The petitioner's claim of being unaware of the proceedings was considered, leading to a decision that justice required providing the petitioner with a chance to contest the tax demand.

4. Consequently, the impugned order dated 30.12.2023 was set aside with the condition that the petitioner remits 10% of the disputed tax demand within two weeks. The petitioner was allowed to respond to the show cause notice within this period. Once the response was received and the 10% payment confirmed, the 1st respondent was directed to grant a reasonable opportunity, including a personal hearing, and issue a fresh order within three months. The bank attachment was lifted due to the setting aside of the assessment order. The writ petition was disposed of without costs, and related petitions were closed.