2024 (7) TMI 986 - HC - GST

Cancellation of GST registration of petitioner - petitioner was unaware of the initiation of proceedings until the petitioner received the impugned recovery notice - discrepancies between the petitioner's GSTR 3B return and the auto-populated GSTR 2A - HELD THAT - On perusal of the order confirming the tax proposal, it is evident that such order pertains to discrepancies between the petitioner's GSTR 3B return and the auto-populated GSTR 2A. Especially in view of the cancellation of the petitioner's GST registration, the petitioner had little reason to monitor the GST portal on an ongoing basis. Therefore, by putting the petitioner on terms, it is just and necessary to provide the petitioner with an opportunity to contest the tax demand on merits. The orders impugned herein are set aside solely with a view to provide the petitioner an opportunity to contest the tax demand on merits. As a corollary, the matter is remanded for reconsideration by respondents 1 2 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 by way of remand.

Summary

Issues:
Challenge to tax proposal confirmation, interest imposition, and recovery notice in writ petitions.

Analysis:
The petitioner, engaged in power aggregation services, sought cancellation of GST registration due to lack of business. Unaware of proceedings until receiving the recovery notice, the petitioner filed writ petitions. Counsel for the petitioner highlighted the lack of awareness post-registration cancellation and offered to remit 10% of the disputed tax demand for remand. The Government Advocate for respondents 1 & 2 acknowledged the preceding intimation, show cause notice, and reminders leading to the impugned order.

The order confirming the tax proposal revealed discrepancies between the petitioner's GSTR 3B return and auto-populated GSTR 2A, particularly significant following the GST registration cancellation. Recognizing the petitioner's limited reason to monitor the GST portal, the court deemed it just to allow the petitioner an opportunity to contest the tax demand on merits. Consequently, the impugned orders were set aside to provide the petitioner with a chance to contest the tax demand, subject to remitting 10% of the disputed tax demand within two weeks.

The matter was remanded for reconsideration by respondents 1 & 2, with the petitioner allowed to submit a reply to the show cause notice within the specified period. Upon satisfaction of the receipt of 10% of the disputed tax demand, respondents 1 & 2 were directed to provide the petitioner with a reasonable opportunity, including a personal hearing, and issue fresh orders within three months from receiving the petitioner's reply. The writ petitions were disposed of without costs, and connected miscellaneous petitions were closed.