2024 (2) TMI 1290 - HC - GST

Principles of natural justice - Validity of assessment order - alleged difference between the Input Tax Credit (ITC) claimed under GSTR 3B and that reflected in GSTR 2A - HELD THAT - The assessing officer merely referred to the reply dated 21.12.2023 to the show cause notice and recorded that the reply is not acceptable. On that basis, the proposed levy of tax, interest and penalty was confirmed. The said findings clearly do not contain any reasons for rejecting the petitioner's reply and for confirming the proposed levy of tax, interest and penalty notwithstanding such reply. Therefore, the impugned order, which is completely unreasoned, calls for interference. The matter is remanded for re-consideration. The respondent is directed to provide a reasonable opportunity to the petitioner, including a personal hearing, and thereafter issue a fresh reasoned order within a maximum period of two months from the date of receipt of a copy of this order - the impugned assessment order is set aside. Petition allowed.

Summary

Issues involved:
The primary issue in this case is the challenge to an assessment order dated 31.12.2023 on the grounds of being unreasoned. The petitioner, a registered person under applicable GST laws, received an audit report after an audit by State GST officials, followed by a show cause notice and a subsequent reply before the impugned order was issued.

Details of the Judgment:

Issue 1 - Unreasoned Assessment Order:
The petitioner challenged the assessment order primarily on the basis that it was unreasoned. The petitioner's counsel pointed out that the assessing officer's findings regarding the alleged difference in Input Tax Credit (ITC) claimed under GSTR 3B and GSTR 2A, as well as the difference between ITC declared in GSTR 9 and GSTR 3B, were deemed unacceptable without providing adequate reasoning. The Court noted that the order lacked reasons for rejecting the petitioner's reply and confirming the proposed levy of tax, interest, and penalty. Consequently, the Court allowed the petition, quashed the assessment order, and remanded the matter for reconsideration, directing the respondent to provide a reasonable opportunity to the petitioner for a fresh reasoned order within two months.

Issue 2 - Principles of Natural Justice:
The respondent, represented by the Government Advocate, contended that the impugned order was issued after adhering to principles of natural justice, as it was preceded by a show cause notice and the petitioner's reply was duly considered. However, the Court found that despite the show cause notice and reply, the order lacked sufficient reasoning, leading to the decision to quash the order and remand the matter for a fresh consideration.

Identical Findings on Multiple Issues:
The Court observed that the findings in the impugned order were identical across various issues, including issue no.1, issue no.3, issue no.4, and issue no.5. The Court highlighted a specific extract from the order where the assessing officer rejected the petitioner's reply without providing adequate reasons, leading to the confirmation of the proposed levy of tax, interest, and penalty. This lack of reasoning in the findings further strengthened the Court's decision to set aside the assessment order and order a reconsideration with proper justification.

In conclusion, the High Court of Madras allowed the petition, quashed the unreasoned assessment order dated 31.12.2023, and remanded the matter for re-consideration with a directive for a fresh reasoned order to be issued within two months, ensuring the petitioner is provided with a reasonable opportunity, including a personal hearing.