2024 (8) TMI 239 - HC - GST

Challenge to order - two parallel proceedings were initiated in respect of the same assessment period - petitioner asserts that two parallel proceedings were initiated in respect of the same assessment period pursuant to scrutiny of returns - mismatch between the petitioner's GSTR 3B returns and the auto-populated GSTR 2A - HELD THAT - On perusal of the impugned order, it is evident that the tax proposal relating to a mismatch between the petitioner's GSTR 3B returns and the auto-populated GSTR 2A was confirmed solely on the ground that the tax payer did not reply to the show cause notice. The admitted position is that a sum of Rs. 3,17,300/- was appropriated from the petitioner's bank account. This amount represents more than 10% of the disputed tax demand in respect of assessments forming the subject of this writ petition and W.P.No.18428 of 2024. In these circumstances, reconsideration is necessary. The impugned order dated 26.12.2023 is set aside and the matter is remanded for reconsideration - Petition disposed off by way of remand.

Summary

Issues:
1. Assailing an order due to initiation of two parallel proceedings for the same assessment period.
2. Interpretation of Section 73 regarding issuance of orders.
3. Compliance with principles of natural justice in tax proceedings.
4. Appropriation of funds without proper consideration leading to the need for reconsideration of the order.

Issue 1:
The petitioner challenged an order dated 26.12.2023 on the grounds of two parallel proceedings being initiated for the same assessment period. The confusion arising from these parallel proceedings hindered the petitioner's participation in the proceedings, leading to the petition.

Issue 2:
The petitioner argued that Section 73 implies the issuance of only one order for a specific assessment period, pointing out that one proceeding was for a mismatch between GSTR 3B and GSTR 2A, while the other was for a mismatch between GSTR 1 and 3B returns. The contention was that the earlier proceeding might be sustainable, but not the later one.

Issue 3:
The respondent, through Mr. T.N.C. Kaushik, contended that principles of natural justice were adhered to by issuing necessary intimations, show cause notices, and reminders. This compliance was crucial in ensuring fairness and procedural correctness in the tax proceedings.

Issue 4:
Upon examining the impugned order, it was found that the tax proposal was confirmed based solely on the petitioner's non-response to the show cause notice regarding a mismatch between GSTR 3B returns and auto-populated GSTR 2A. An amount of Rs. 3,17,300/- was appropriated from the petitioner's bank account, representing a significant portion of the disputed tax demand. Due to this, the court ordered the setting aside of the order and remanded the matter for reconsideration, allowing the petitioner to submit a reply and ensuring a reasonable opportunity for a fresh order within three months.

In conclusion, the High Court of Madras set aside the impugned order, emphasizing the importance of procedural fairness and proper consideration in tax proceedings. The judgment highlighted the need for adherence to natural justice principles, clarity in the issuance of orders, and the right of the petitioner to participate effectively in the proceedings without facing undue confusion or prejudice.