2024 (7) TMI 673 - HC - GST

Validity of assessment order - petitioner did not have a reasonable opportunity to contest the tax demand on merits - violation of principles of natural justice - HELD THAT - On examining the impugned order, it is evident that the tax proposal was confirmed because the petitioner failed to reply to the show cause notice or submit any documentary evidence in accordance with the Circular No.183 and Circular No.193. By taking note of the assertion that non participation was on account of not being aware of the proceedings, the interest of justice warrants that the petitioner be provided an opportunity to contest the tax demand on merits by putting the petitioner on terms. The impugned order dated 09.01.2024 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. The petitioner is permitted to submit a reply to the show cause notice within the aforesaid period. Petition disposed off.

Summary

Issues:
Challenge to assessment order due to lack of opportunity to contest tax demand on merits.

Analysis:
The petitioner challenged an assessment order dated 09.01.2024, claiming they did not have a reasonable opportunity to contest the tax demand on merits. The petitioner argued that they were unaware of the proceedings leading to the order as the communication was uploaded on the GST portal without any other mode of communication. The tax proposals were related to discrepancies between the petitioner's GSTR 3B return and the GSTR 1 return or the auto-populated GSTR 2A. The petitioner expressed willingness to explain the discrepancies if given an opportunity and agreed to remit 10% of the disputed tax demand for a remand.

The respondent, represented by Mr. C. Harsha Raj, AGP (T), contended that the principles of natural justice were followed by issuing intimation, show cause notice, and multiple personal hearing notices. The impugned order confirmed the tax proposal due to the petitioner's failure to respond to the show cause notice or provide documentary evidence as per Circular No.183 and Circular No.193. Considering the petitioner's claim of non-participation due to lack of awareness, the court deemed it just to provide an opportunity to contest the tax demand on merits by imposing certain conditions.

The court set aside the impugned order on the condition that the petitioner remits 10% of the disputed tax demand within two weeks and submits a reply to the show cause notice within the same period. Upon receiving the reply and being satisfied with the payment, the respondent was directed to provide a reasonable opportunity to the petitioner, including a personal hearing, and issue a fresh order within three months. The writ petition was disposed of without any costs, and connected miscellaneous petitions were closed as a result of the judgment.