2024 (10) TMI 1503 - HC - GST

Challenge to assessment order - discrepancy between Form 26AS and the petitioner's returns - personal hearing was granted or not - violation of principles of natural justice - HELD THAT - The documents on record clearly indicate that the assessment order was preceded by a show cause notice, which indicates that a personal hearing was offered. However, the assessment order also discloses that the petitioner was not heard. The petitioner is a civil works contractor and it is quite common for such civil work contractors to receive payments in the form of mobilization advances and against running account bills. The operative portion of the impugned assessment order clearly indicates that the tax liability was confirmed by disregarding the objections of the petitioner that the receipts in Form 26AS cannot be treated as the turnover. In these circumstances, the interest of justice demands that the petitioner should be heard. Solely for this reason, the impugned assessment order warrants interference, albeit by putting the petitioner on terms. The impugned assessment order is quashed subject to the condition that the petitioner remits 10% of the disputed tax demand as agreed to within a maximum period of two weeks from the date of receipt of a copy of this order. Subject to being satisfied that 10% of the disputed tax demand was received, the assessing officer is directed to provide a reasonable opportunity, including a personal hearing, and thereafter issue a fresh assessment order in accordance with law with in a maximum period of two months thereafter. Petition disposed off.

Summary

Issues: Challenge to assessment order, Principles of natural justice, Personal hearing, Discrepancies in returns, Barred by limitation

The judgment pertains to a writ petition challenging an assessment order dated 29.12.2023 issued to a civil contractor registered under GST statutes. The petitioner received a notice in Form ASMT-10 alleging discrepancies in returns, followed by a show cause notice in August 2023, to which the petitioner responded in September 2023 with enclosed documents. The assessment order was issued in December 2023, drawing conclusions based on Form 26AS and receipts reflected therein. The petitioner contended that Form 26AS is not indicative of taxable turnover. The petitioner submitted various documents like audited accounts, audit reports, and GST returns. The petitioner argued that no personal hearing was granted, which could have clarified the discrepancies. The petitioner expressed willingness to remit 10% of the disputed tax demand for remand.

The Additional Government Pleader pointed out that principles of natural justice were followed, as a show cause notice was issued, and a personal hearing was offered but not availed by the petitioner. The assessment order confirmed tax liability despite the petitioner's objections regarding Form 26AS. The court noted that the assessment order did not provide a hearing to the petitioner, and it was crucial for justice that the petitioner be heard. Consequently, the assessment order was quashed with the condition that the petitioner remits 10% of the disputed tax demand within two weeks. The assessing officer was directed to provide a reasonable opportunity, including a personal hearing, and issue a fresh assessment order within two months. The petitioner was allowed to submit additional documents as required.

In conclusion, the writ petition was disposed of with no costs, and related motions were closed. The judgment emphasized the importance of providing a fair hearing to the petitioner in tax assessment matters and ensuring compliance with principles of natural justice, ultimately leading to the quashing of the assessment order and a direction for a fresh assessment with proper opportunity for the petitioner to present their case.