2025 (1) TMI 718 - HC - GST

Violation of principles of natural justice - upholding the difference in Forms GSTR 9 and 9C without considering the reply filed by the petitioner - HELD THAT - There are no discussion on the reply filed by the petitioner except the reference made thereto in the defence submission in para 6, but, in the discussion and findings, the Adjudicating Authority has not referred to the details submitted by the petitioner and merely because the petitioner did not appear before the respondent authority, it was presumed that the petitioner failed to provide the supporting documents in connection with the reply though the same were annexed with the reply as is evident on perusal of the reply placed on record at page 47 in the Special Civil Application No.4160 of 2024. The matters are remanded back to the Adjudicating Authority to pass de-novo fresh order taking into consideration the reply filed by the petitioner. Petition disposed off by way of remand.

1. ISSUES PRESENTED and CONSIDERED

The core legal questions addressed in this judgment include:

Whether the Adjudicating Authority erred in confirming the disallowance based on the mismatch between Forms GSTR-9 and GSTR-9C for the financial year 2017-18.
Whether the Adjudicating Authority failed to consider the petitioner's reply and supporting documents in its decision-making process.
Whether the procedural fairness was compromised due to the petitioner's absence at the personal hearing.
Whether the impugned orders are sustainable under the provisions of the Central Goods and Services Tax Act, particularly Section 44.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Mismatch between Forms GSTR-9 and GSTR-9C

Relevant legal framework and precedents: The Central Goods and Services Tax Act, particularly Section 73, which deals with the determination of tax not paid or short paid.
Court's interpretation and reasoning: The court emphasized the need for the Adjudicating Authority to consider the petitioner's explanations and supporting documents regarding the mismatch.
Key evidence and findings: The petitioner argued that the discrepancy was due to an inadvertent error and that the turnover related to Maharashtra and Delhi, where GST had been duly paid.
Application of law to facts: The court found that the Adjudicating Authority failed to verify the petitioner's claims with the provided documents.
Treatment of competing arguments: The respondent acknowledged the oversight in not considering the petitioner's reply and documents.
Conclusions: The court concluded that the orders were not tenable and required a de-novo consideration.

Issue 2: Consideration of Petitioner's Reply and Documents

Relevant legal framework and precedents: Principles of natural justice and procedural fairness.
Court's interpretation and reasoning: The court noted the absence of any detailed consideration of the petitioner's reply in the Adjudicating Authority's decision.
Key evidence and findings: The petitioner's reply and supporting documents were not adequately considered, as evidenced by the lack of discussion in the impugned order.
Application of law to facts: The court found that procedural fairness was compromised, warranting a remand for fresh consideration.
Treatment of competing arguments: The respondent admitted the oversight in the adjudication process.
Conclusions: The court ordered a remand for de-novo consideration with an opportunity for the petitioner to be heard.

Issue 3: Procedural Fairness and Absence at Personal Hearing

Relevant legal framework and precedents: Right to be heard as part of natural justice principles.
Court's interpretation and reasoning: The court emphasized that absence at a hearing does not absolve the authority from considering written submissions.
Key evidence and findings: The petitioner's absence was noted, but the court found that the documents were submitted and should have been considered.
Application of law to facts: The court determined that the lack of consideration of the petitioner's documents was a procedural lapse.
Treatment of competing arguments: The respondent acknowledged the procedural oversight.
Conclusions: The court directed a fresh hearing with proper consideration of the petitioner's submissions.

Issue 4: Sustainability of Impugned Orders under GST Act

Relevant legal framework and precedents: Section 44 of the GST Act regarding the filing of annual returns.
Court's interpretation and reasoning: The court found that the orders were unsustainable due to the lack of consideration of the petitioner's documents and explanations.
Key evidence and findings: The mismatch was attributed to an inadvertent error, and the petitioner claimed compliance with GST payments in other states.
Application of law to facts: The court determined that the orders did not align with the legal requirements for a fair adjudication process.
Treatment of competing arguments: The respondent did not contest the need for a remand.
Conclusions: The court quashed the orders and remanded the matters for fresh adjudication.

3. SIGNIFICANT HOLDINGS

Preserve verbatim quotes of crucial legal reasoning: "I therefore find that the taxpayer has failed to discharge the burden of proof and provide evidence to support its claims. Therefore, the demand for tax, interest and penalty must be upheld."
Core principles established: The necessity for adjudicating authorities to consider all submissions and documents provided by parties to ensure procedural fairness.
Final determinations on each issue: The impugned orders were quashed, and the matters were remanded for de-novo consideration with directions to consider the petitioner's submissions and provide an opportunity for a hearing.

The court's decision underscores the importance of procedural fairness and the requirement for authorities to thoroughly consider all evidence and submissions in tax adjudications.

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