2024 (8) TMI 295 - HC - GST

Challenge to assessment order and the consequential bank attachment - SCN and impugned order were uploaded in the view additional notices and orders tab of the GST portal - petitioner unaware of the proceedings until the bank account was attached - HELD THAT - On perusal of the impugned order, it appears that tax liability was imposed on the allegation of sale suppression based on the difference between purchase value and outward supply value. The petitioner has asserted that it could not participate in proceedings on account of being unaware of the same. By taking the said assertion into account and by taking into account the nature of the confirmed tax proposal, the interest of justice warrants reconsideration subject to putting the petitioner on terms. The impugned order is set aside on condition that the petitioner remits 5% of the disputed tax demand within two weeks from the date of receipt of a copy of this order. Within the said period, the petitioner is permitted to submit a reply to the show cause notice - Petition disposed off.

Issues:
Challenged assessment order and bank attachment based on discrepancies between GSTR 3B returns and GSTR 2A; Allegation of sale suppression and imposition of tax liability; Compliance with principles of natural justice; Petitioner's unawareness of proceedings leading to bank attachment; Setting aside impugned order on condition of remitting 5% disputed tax demand; Providing opportunity for petitioner to reply to show cause notice and issuing a fresh order.

Analysis:

1. Challenged Assessment Order and Bank Attachment:
The writ petitions challenged an assessment order and consequential bank attachment due to discrepancies between the petitioner's GSTR 3B returns and auto-populated GSTR 2A. The petitioner claimed unawareness of proceedings until the bank account was attached, as the show cause notice and impugned order were uploaded on the GST portal without their knowledge.

2. Allegation of Sale Suppression and Tax Liability:
The assessing officer imposed tax liability on the petitioner based on the allegation of sale suppression, noting a difference between inward supplies per GSTR 2A and outward supply turnover per GSTR 3B. The petitioner argued that the burden of establishing sales suppression lies with the respondent and not them, offering to remit 5% of the disputed tax demand as a condition for remand.

3. Compliance with Principles of Natural Justice:
The Government Advocate contended that principles of natural justice were followed, citing the issuance of a show cause notice and offering a personal hearing to the petitioner. However, the petitioner's claim of unawareness of the proceedings raised concerns regarding procedural fairness.

4. Setting Aside Impugned Order and Providing Opportunity:
Upon perusal of the impugned order, it was observed that tax liability was imposed based on the alleged sale suppression, while the petitioner claimed non-participation due to lack of awareness. In the interest of justice, the impugned order was set aside on the condition that the petitioner remits 5% of the disputed tax demand within a specified period.

5. Fresh Order and Resolution:
The court directed the petitioner to submit a reply to the show cause notice within the stipulated period after remitting the specified amount. Upon receipt and satisfaction of the remittance, the assessing authority was instructed to provide a reasonable opportunity to the petitioner, including a personal hearing, and issue a fresh order within three months. Consequently, the bank attachment was lifted.

6. Disposition and Conclusion:
The writ petitions were disposed of based on the above terms, with no costs imposed. The associated miscellaneous petitions were closed, bringing the matter to a resolution while ensuring procedural fairness and compliance with the principles of natural justice.

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