2024 (7) TMI 593 - HC - GST

Challenge to assessment order - attachment of bank account - reversal of ITC - difference between the Input Tax Credit (ITC) availed of by the petitioner in the returns filed in Form GSTR-3B as compared to the auto populated GSTR-2A return for the corresponding period - HELD THAT - On examining the impugned assessment order, it is evident that the assessing officer did not take into account the reply submitted by the petitioner to the intimation dted 09.12.2022 on 22.12.2022. In addition, no personal hearing was granted to the petitioner. Hence the assessment order dated 25.05.2023 is quashed and the matter is remanded for re-consideration for the assessing officer. The assessing officer is directed to provide a reasonable opportunity to the petitioner, including a personal hearing, and thereafter issue a fresh assessment order within a maximum period of two months from the date of receipt of a copy of this order. In view of the assessment order being quashed, the order of attachment of the petitioner's bank account stands raised. Petition disposed off.

Summary

Issues: Assessment order validity, Input Tax Credit (ITC) availed, personal hearing opportunity, attachment of bank account.

Assessment Order Validity:
The petitioner challenged an assessment order dated 25.05.2023 related to the assessment year 2017-18. The petitioner, engaged in trading dyes and chemicals, faced discrepancies in Input Tax Credit (ITC) between returns filed in Form GSTR-3B and auto-populated GSTR-2A. Despite responding to intimation and a show cause notice, the assessment order was issued without considering the petitioner's submissions.

Input Tax Credit (ITC) Availed:
The sole reason for ITC reversal was the alleged discrepancy between GSTR-3B and 2A returns. The petitioner's explanation and responses to the intimation and show cause notice were disregarded, leading to the assessment order. The High Court noted the failure of the assessing officer to consider the petitioner's reply to the intimation dated 09.12.2022, emphasizing the importance of due process in tax assessments.

Personal Hearing Opportunity:
The petitioner's counsel highlighted that the petitioner had requested an adjournment for a personal hearing, which was not granted before issuing the assessment order. In response, the Additional Government Pleader argued that the petitioner had missed opportunities for personal hearings and contesting the tax demand effectively. The High Court directed the assessing officer to provide a reasonable opportunity to the petitioner, including a personal hearing, before issuing a fresh assessment order within two months.

Attachment of Bank Account:
Following the assessment order, the petitioner's bank account in Kotak Mahindra Bank was attached, and funds were appropriated. However, upon quashing the assessment order, the High Court ordered the lifting of the attachment and directed that the appropriated amounts abide by the outcome of the re-examination by the assessing officer. The judgment resolved the matter by quashing the assessment order, providing the petitioner with a fair opportunity for a personal hearing, and closing related proceedings without imposing costs.