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2024 (6) TMI 893 - MADRAS HIGH COURTViolation of principles of natural justice - petitioner was not provided a reasonable opportunity to contest the tax demand on merits - mismatch between GSTR-3B and the auto-populated GSTR-2A - HELD THAT - On examining the impugned order, it is clear that the confirmed tax proposal pertains to mismatch between the GSTR-3B returns and the auto-populated GSTR-2A. Such tax proposal was confirmed because the petitioner did not reply to the show cause notice. Therefore, the interest of justice warrants that the petitioner be provided an opportunity to contest the tax demand on merits, albeit by putting the petitioner on terms. The impugned order dated 05.12.2023 is set aside and the matter is remanded for reconsideration subject to the condition that the petitioner remits 10% of the disputed tax demand as agreed to within two weeks from the date of receipt of a copy of this order. Within the aforesaid period, the petitioner is permitted to send a detailed reply to the show cause notice by enclosing all the relevant documents. Petition disposed off by way of remand. Issues involved: Challenge to tax demand order due to lack of opportunity for contesting.
Summary: Issue 1: Lack of Opportunity for Contesting Tax Demand The petitioner challenged an order dated 05.12.2023, claiming they were not given a reasonable opportunity to contest the tax demand. The petitioner argued that they were unaware of the proceedings leading to the order as the notice and order were only uploaded on the GST portal. It was only when garnishee proceedings began in March 2024 that the petitioner became aware of the situation. Issue 2: Alleged Mismatch in Tax Proposal The petitioner contended that the confirmed tax proposal was based on a mismatch between GSTR-3B and GSTR-2A, asserting that only eligible Input Tax Credit (ITC) was claimed. The petitioner agreed to remit 10% of the disputed tax demand as a condition for reconsideration. Issue 3: Respondent's Position The Government Advocate representing the respondent argued that the petitioner was given sufficient opportunity, including a show cause notice and a personal hearing, as evidenced by the impugned order. Judgment Upon examination, it was found that the tax proposal was confirmed due to the petitioner's failure to respond to the show cause notice. The court set aside the order dated 05.12.2023 and remanded the matter for reconsideration. The petitioner was directed to remit 10% of the disputed tax demand within two weeks and provide a detailed reply to the show cause notice with relevant documents. The respondent was instructed to offer a reasonable opportunity for contesting the tax demand, including a personal hearing, and issue a fresh order within three months of receiving the petitioner's reply. The garnishee order was also set aside. The case was disposed of with no costs incurred, and related motions were closed accordingly.
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