2024 (7) TMI 668 - HC - GST

Violation of principles of natural justice - SCN and other communications were uploaded on the GST portal, but not communicated to the petitioner through any other mode - mismatch between the petitioner's GSTR 1 and GSTR 3B returns - HELD THAT - It is evident that the tax proposal was confirmed because the petitioner did not reply to the show cause notice or submit relevant documents. By taking into account the assertion that the petitioner could not participate in proceedings on account of being unaware of the same, the interest of justice warrants reconsideration, albeit by putting the petitioner on terms. The impugned order dated 29.12.2023 is set aside on condition that the 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 disposed off by way of remand.

Summary

Issues involved:
Challenge on breach of principles of natural justice due to lack of communication of show cause notice, mismatch between GSTR 1 and GSTR 3B returns, compliance with principles of natural justice, reconsideration of tax proposal due to petitioner's unawareness of proceedings.

Analysis:

1. The petitioner challenged an order dated 29.12.2023, citing a breach of principles of natural justice. The petitioner claimed that the show cause notice and other communications were only uploaded on the GST portal, not directly communicated, leading to unawareness of the proceedings until the receipt of a recovery notice on 25.04.2024.

2. The petitioner's counsel argued that the tax proposal was based on a mismatch between the petitioner's GSTR 1 and GSTR 3B returns. The petitioner expressed willingness to explain the mismatch if given an opportunity and agreed to remit 10% of the disputed tax demand for remand.

3. The Government Advocate for the respondent contended that principles of natural justice were followed by issuing a show cause notice on 19.09.2023 and offering a personal hearing to the petitioner.

4. Upon examination, it was found that the tax proposal was confirmed as the petitioner did not respond to the show cause notice or provide relevant documents. Considering the petitioner's claim of unawareness hindering participation, the court deemed it necessary to set aside the impugned order for reconsideration, with the petitioner required to remit 10% of the disputed tax demand within two weeks.

5. The court directed the petitioner to submit a reply to the show cause notice within the specified period. Upon receipt of the reply and confirmation of the remittance, the respondent was instructed to provide a reasonable opportunity for a personal hearing and issue a fresh order within three months.

6. Consequently, the court disposed of the writ petition on the condition of remittance and reconsideration, without imposing any costs, and closed connected miscellaneous petitions.