2024 (7) TMI 1102 - HC - GST

Violation of principles of natural justice - petitioner's reply was not taken into consideration - mismatch between the petitioner's GSTR 3B returns and the auto populated GSTR 2A as regards Input Tax Credit - HELD THAT - On examining the impugned order in comparison to the petitioner's reply, it is noticeable that the petitioner's assertion that the ITC available in GSTR 2A exceeds that availed of in GSTR 3B was not considered. Similarly, with regard to the turnover mismatch between the petitioner's GSTR 1 return and the e-way bill portal, the petitioner's reply to the effect that the tax liability was discharged was not taken into consideration. Consequently, the matter requires re-consideration. The impugned order dated 30.01.2024 is set aside and the matter is remanded for re-consideration. After providing a reasonable opportunity to the petitioner, including a personal hearing, the first respondent is directed to issue a fresh order within three months from the date of receipt of a copy of this order - petition disposed off.

Summary

Issues:
1. Consideration of petitioner's reply in tax assessment
2. Mismatch in Input Tax Credit (ITC) between GSTR 3B and GSTR 2A
3. Turnover mismatch between GSTR 1 and e-way bill portal
4. Recovery of funds from petitioner's bank account

Analysis:
1. The judgment concerns the challenge to an order in original dated 30.01.2024 on the grounds of the petitioner's reply not being considered during the assessment process. The petitioner's response to an ASMT 10 notice issued on 15.03.2023, which highlighted discrepancies in Input Tax Credit (ITC) and turnover figures, was crucial. The show cause notice of 14.12.2022 addressed these issues, leading to the impugned order based on the petitioner's explanations.

2. The petitioner contended that the ITC mismatch issue was not adequately addressed in the impugned order, citing contradictory findings and the absence of Section 16(4) mention in the show cause notice. The petitioner's claim that ITC available in GSTR 2A exceeded that in GSTR 3B was not acknowledged. This discrepancy necessitated a re-examination of the matter.

3. Another significant issue was the turnover mismatch between the petitioner's GSTR 1 return and the e-way bill portal. The petitioner asserted that the tax liability was discharged, which was not duly considered in the impugned order. The court noted the importance of re-evaluating this aspect for a fair decision.

4. Regarding the recovery of funds from the petitioner's bank account, the court observed that a substantial sum was deducted pursuant to the impugned order. However, since the assessment order was set aside for reconsideration, the bank attachment was lifted, ensuring fairness in the process.

In conclusion, the High Court set aside the impugned order and remanded the matter for re-consideration. The first respondent was directed to issue a fresh order within three months, providing the petitioner with a reasonable opportunity, including a personal hearing. The judgment aimed to rectify the oversight in considering the petitioner's explanations and ensuring a just outcome.