2024 (7) TMI 1197 - HC - GST

Challenge to assessment order - breach of principles of natural justice - Since the notices were uploaded on the GST portal, the petitioner asserts that she was unaware of the initiation of proceedings - HELD THAT - On perusal of the impugned order, it is evident that the tax demand pertains to the alleged disparity between the GSTR 3B returns filed by the petitioner and the auto populated GSTR 2A returns. In recognition of difficulties encounted by taxpayers in this regard, Circular no.183 was issued. On account of the petitioner not being heard before the impugned order was issued, the petitioner was unable to contest the tax demand. However, it should be noticed that the petitioner did not fulfil the obligation of monitoring the GST portal continually in spite of being a registered person. Solely with a view to provide an opportunity to the petitioner to contest the tax demand on merits, the impugned order is quashed subject to the petitioner remitting 10% of the disputed tax demand as agreed to within fifteen days from the date of receipt of a copy of this order and the matter is remanded for re-consideration. The petitioner is permitted to submit a reply to the show cause notice within fifteen days from the date of receipt of a copy of this order. Petition disposed off.

Summary

Issues:
Challenge to assessment order based on breach of natural justice principles and lack of communication of notices; Alleged disparity between GSTR 3B and GSTR 2A returns; Non-compliance with Circular no.183; Lack of opportunity for petitioner to contest tax demand.

Analysis:
The petitioner, engaged in trading electrical and hardware goods and registered under GST enactments, contested an assessment order dated 09.11.2023 primarily on grounds of natural justice violation. The petitioner claimed unawareness of proceedings initiation due to notices being uploaded on the GST portal without direct communication. Consequently, a garnishee order attaching the petitioner's bank account was issued on 04.03.2024, prompting the filing of a writ petition challenging the order.

The petitioner's counsel argued that the lack of direct communication hindered the petitioner's response to the notices, emphasizing a discrepancy between GSTR 3B and auto-populated GSTR 2A returns. Reference was made to a judgment by the Madurai Bench and Circular no.183, alleging non-adherence to these precedents. The Government Advocate, representing the respondents, countered by stating that despite postal service of Form DRC-01A, the petitioner failed to respond to the intimation or show cause notice, justifying no interference.

Upon scrutiny, it was found that the tax demand related to the disparity between the petitioner's GSTR 3B and GSTR 2A returns. Despite Circular no.183 addressing such issues, the petitioner's failure to monitor the GST portal regularly led to non-contestation of the tax demand. However, in a bid to grant the petitioner an opportunity to contest the demand, the court quashed the impugned order subject to the petitioner remitting 10% of the disputed tax amount within fifteen days. The matter was remanded for reconsideration, allowing the petitioner to reply to the show cause notice and ensuring a personal hearing before a fresh order is issued within two months.

In conclusion, the court disposed of the case, directing the first respondent to provide a reasonable opportunity to the petitioner for contestation, leading to the lifting of the bank attachment. The judgment aimed to balance natural justice principles with the taxpayer's obligations under the GST regime, ensuring a fair chance for the petitioner to address the tax demand.