2024 (7) TMI 1105 - HC - GST

Violation of principles of natural justice - it is asserted that the petitioner was unable to contest the tax demand on merits because the consultant engaged by the petitioner had not informed the petitioner about these proceedings - HELD THAT - On examining the impugned order, it is evident that the tax proposal was confirmed because the petitioner did not reply to the show cause notice. It also appears that the proposal relates to a comparison between the inward supply, as gleaned from the GSTR 2A, and the outward supply. The petitioner has placed on record evidence that he opted for composition levy and filed quarterly returns in Form GSTR 4. In these circumstances, the interest of justice warrants re-consideration, albeit by putting the petitioner on terms. The impugned order dated 22.12.2023 is set aside on condition that the petitioner remits 10% of the disputed tax demand within a period of two weeks from the date of receipt of a copy of this order - petition disposed off.

Summary

Issues:
Breach of principles of natural justice in tax demand contestation.

Analysis:
The judgment pertains to a writ petition challenging an order in original dated 22.12.2023 on grounds of breach of principles of natural justice. The petitioner claimed inability to contest the tax demand due to lack of information from their consultant. The petitioner had opted for the composition scheme and filed returns in Form GSTR 4 quarterly. The confirmed tax proposal was deemed unsustainable as it related to a mismatch between outward and inward supply. The petitioner agreed to remit 10% of the disputed tax demand as a condition for remand. The Government Advocate contended that principles of natural justice were followed through notices issued. The impugned order confirmed the tax proposal due to the petitioner's non-reply to the show cause notice, focusing on the comparison between inward and outward supply. The court, considering the evidence of composition levy and quarterly returns, set aside the order on the condition of remitting 10% of the disputed tax demand within two weeks and submitting a reply to the show cause notice. The respondent was directed to provide a reasonable opportunity for a personal hearing and issue a fresh order within three months from receiving the petitioner's reply. The writ petition was disposed of with no costs, and related motions were closed.