2024 (2) TMI 284 - HC - GST

Validity of GST assessment order raising demand of tax with interest - Procedure for scrutiny of GST returns u/s 61 read with rule 99 not followed - Maintainability of petition - availability of alternative remedy - HELD THAT - The impugned order reflects that the said order was issued after considering the assessee's replies dated 08.08.2023, 16.08.2023 and 31.08.2023. It also reflects that a personal hearing was granted to the petitioner. Therefore, it is evident that principles of natural justice were followed before issuing the impugned order. In the impugned order, eight alleged defects in the return filed by the petitioner were examined. In respect of each alleged effect, the reply of the assessee was considered and findings were recorded. Eventually, the proposal was dropped in respect of three defects and it was held that the petitioner is liable with regard to the five defects specified in the revenue abstract at the foot of the order. It is not required to exercise discretionary jurisdiction in view of the statutory appeal being available - petition dismissed.

Summary

Issues involved: Assessment order under GST regime challenged for non-compliance with statutory provisions and lack of opportunity to address tax liability under forward charge mechanism.

Comprehensive details:

1. The petitioner, a registered person under the GST regime, challenged an assessment order dated 13.10.2023, which imposed tax and penalty after issuing a notice in Form DRC-01. The petitioner responded to the notice on 08.08.2023. The impugned order concluded the petitioner's liability under five heads. The main contention raised was the non-compliance with Section 61 of the Central Goods and Services Tax Act and Rule 99, specifically regarding the issuance of notice in Form ASM-10 before scrutiny. The petitioner also argued that they were not given a fair opportunity to address the tax liability under the forward charge mechanism.

2. The learned senior counsel for the petitioner argued that the impugned order did not follow the prescribed procedure and did not provide a reasonable opportunity to address the tax liability issue. On the other hand, the Additional Government Pleader submitted that the proceedings originated from an inspection, exempting the need for strict adherence to Section 61 of the CGST Act. He further defended the finding that the forward charge mechanism would apply unless the reverse charge mechanism is prescribed, stating it does not invalidate the impugned order and highlighting the availability of an appellate remedy.

3. The impugned order indicated that it was issued after considering the petitioner's responses and granting a personal hearing. Principles of natural justice were followed, examining eight alleged defects in the petitioner's return. After reviewing each defect and the petitioner's responses, it was concluded that the petitioner was liable for five specified defects. The order allowed for an appeal against the decision.

4. The court declined to exercise discretionary jurisdiction, noting the availability of a statutory appeal. The writ petition was dismissed without costs, leaving the option open for the petitioner to file a statutory appeal. The judgment did not express any opinion on the merits of the case, and related motions were closed.