2024 (7) TMI 243 - HC - GST

Violation of principles of natural justice - petitioner was not provided a reasonable opportunity to contest the tax demand on merits - inadvertent error was made while filing the annual return by choosing Column 6 D instead of Column 6 B , resulting into tax error - HELD THAT - The petitioner's reply dated 11.01.2023 indicates that the GSTR 3B returns for assessment period 2017-18 along with a comparison statement between the GSTR 2A and the GSTR 3B returns were annexed. The assessing officer does not appear to have taken note of these documents while confirming the tax proposal. However, as contended by learned Additional Government Pleader, the petitioner has also failed to subsequently participate in proceedings or file the reconciliation statement in GSTR 9C. In these circumstances, while reconsideration is necessary, it is also necessary to put the petitioner on terms. The impugned order dated 28.12.2023 is set aside on condition that the petitioner remits 5% of the disputed tax demand as agreed to within two weeks from the date of receipt of a copy of this order - Petition disposed off.

Summary

Issues involved:
Challenge to tax demand due to lack of opportunity for contesting, error in annual return filing, non-consideration of GSTR 3B returns by assessing officer, compliance with principles of natural justice, requirement for reconciliation statement in Form GSTR 9C, setting aside the impugned order, remittance of 5% disputed tax demand, provision for additional document submission, issuance of fresh order with personal hearing, lifting of bank attachment.

Analysis:
The writ petition challenges an order dated 28.12.2023, alleging that the petitioner was not afforded a fair chance to contest the tax demand on its merits. The petitioner admitted to reporting both inward and outward supplies in the GSTR 3B and GSTR 1 returns but cited an inadvertent error in choosing the wrong column while filing the annual return, resulting in the tax proposal. The petitioner claimed ignorance of the order until a bank attachment notice was served on 17.05.2024.

The petitioner's counsel argued that the assessing officer failed to consider the GSTR 3B returns and a comparison statement between GSTR 2A and GSTR 3B provided by the petitioner, urging for a remand with a 5% remittance of the disputed tax demand. On the other hand, the Additional Government Pleader contended that the principles of natural justice were adhered to through various notices and highlighted the absence of a reconciliation statement in Form GSTR 9C, which led to the confirmation of the tax proposal.

Despite the assessing officer's oversight of the documents submitted by the petitioner, it was noted that the petitioner did not engage further in the proceedings or file the required reconciliation statement. Thus, the impugned order was set aside on the condition that the petitioner remits 5% of the disputed tax demand within two weeks and submits any additional documents within that period. Upon satisfaction of the remittance, the respondent was directed to provide a reasonable opportunity for the petitioner, including a personal hearing, and issue a fresh order within three months.

Consequently, the assessment order was annulled, leading to the lifting of the bank attachment. The writ petition was disposed of with no costs imposed, and related miscellaneous petitions were closed accordingly.