2024 (6) TMI 431 - HC - GST

Violation of principles of natural justice - challenge to assessment order - petitioner was not provided a reasonable opportunity because the show cause notice and order were not communicated to him by any other mode other than uploading on the GST portal - reconciliation of disparity between the GSTR 3B and GSTR 2A returns while filing the annual return in Form GSTR-9 - HELD THAT - The petitioner has placed on record the annual return in Form GSTR-9. It is asserted that the disparity was reconciled in such annual return. Undoubtedly, the petitioner did not participate in proceedings and, hence, could not contest the tax demand. Therefore, on being put on terms, the petitioner should be provided an opportunity to contest the tax demand. The impugned order dated 10.08.2023 is quashed subject to the condition that petitioner remits 10% of the disputed tax demand, as agreed to, within a period of two weeks from the date of receipt of a copy of this order - Petition allowed.

Summary

Issues involved: Challenge to assessment order u/s principles of natural justice.

The High Court of Madras quashed an assessment order dated 10.08.2023 challenged on the ground of breach of principles of natural justice. The petitioner, a registered person under applicable GST enactments, claimed unawareness of proceedings initiated as the relevant show cause notice and impugned order were uploaded on the GST portal. The petitioner, upon the attachment of their bank account, became aware of it on 13.02.2024. The petitioner reconciled the disparity between GSTR 3B and GSTR 2A returns while filing the annual return in Form GSTR-9. It was argued that the petitioner was not provided a reasonable opportunity as the show cause notice and order were only communicated through the GST portal. The petitioner agreed to remit 10% of the disputed tax demand as a condition for remand.

The respondent, represented by Mr. C. Harsha Raj, Additional Government Pleader, contended that the petitioner was provided with sufficient opportunity which was not availed. The petitioner, although having reconciled the disparity in the annual return, did not participate in the proceedings to contest the tax demand. The court held that the petitioner should be given an opportunity to contest the tax demand upon remitting 10% of the disputed tax demand.

Consequently, the impugned assessment order dated 10.08.2023 was quashed subject to the condition of remitting 10% of the disputed tax demand within two weeks. The petitioner was allowed to file a reply to the show cause notice within the same period. Upon receipt of the reply and satisfaction of the payment, the respondent was directed to provide a reasonable opportunity to the petitioner, including a personal hearing, and issue a fresh assessment order within two months. The bank attachment order was to be raised as a consequence of the quashed assessment order. The writ petition was allowed with no order as to costs, and the connected miscellaneous petitions were closed.