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2024 (7) TMI 1198 - HC - GSTViolation of principles of natural justice - petitioner was not provided a reasonable opportunity - inadvertent error was made while filling up the GSTR 3B returns, whereby the available ITC was mentioned in row 4(A)(3) pertaining to inward supply liable to reverse charge - HELD THAT - On perusal of the impugned order, it is evident that the tax liability pertains to alleged discrepancy in availment of ITC. Such conclusion has been reached on the basis of the petitioner's GSTR 3B return. In view of the explanation provided by the petitioner in the affidavit, it is just and appropriate that the petitioner be provided an opportunity to contest the tax demand by putting the petitioner on terms. The impugned order dated 23.11.2023 is set aside subject to the condition that the petitioner remits 10% of the disputed tax demand within a period of two weeks from the date of receipt of a copy of this order. Within the aforesaid period, the petitioner is permitted to submit a reply to the show cause notice - petition disposed off.
Issues:
Challenge to order based on lack of reasonable opportunity for petitioner, Discrepancy in availment of Input Tax Credit (ITC), Setting aside the impugned order subject to conditions, Providing an opportunity to contest tax demand, Disposal of the writ petition and related matters. Issue 1: Challenge to order based on lack of reasonable opportunity for petitioner The writ petition challenges an order dated 23.11.2023 on the grounds of the petitioner not being provided a reasonable opportunity. The petitioner availed Input Tax Credit (ITC) from procurements made from a specific entity, which was reflected in the GSTR 2A. However, an error occurred while filling the GSTR 3B returns, leading to the entire tax liability arising from this mistake. The petitioner, through counsel, is willing to remit 10% of the disputed tax demand as a condition for remand. Issue 2: Discrepancy in availment of Input Tax Credit (ITC) The tax liability in question relates to an alleged discrepancy in the availment of ITC, as identified from the petitioner's GSTR 3B return. The impugned order was preceded by a notice and a show cause notice, with a personal hearing offered to the petitioner. The High Court, upon reviewing the affidavit and explanation provided by the petitioner, deems it just and appropriate to provide the petitioner with an opportunity to contest the tax demand by setting aside the impugned order subject to conditions. Issue 3: Setting aside the impugned order subject to conditions The High Court sets aside the impugned order dated 23.11.2023 with the condition that the petitioner remits 10% of the disputed tax demand within two weeks from receiving a copy of the order. Within this period, the petitioner can submit a reply to the show cause notice. Upon receipt of the reply and confirmation of the remittance, the respondent is directed to provide a reasonable opportunity to the petitioner, including a personal hearing, and issue a fresh order within two months from receiving the reply. Consequently, the bank attachment and recovery notice are also set aside. Issue 4: Providing an opportunity to contest tax demand The High Court's decision ensures that the petitioner is given a fair opportunity to contest the tax demand by allowing for submissions, personal hearing, and the issuance of a fresh order within a specified timeframe. This process aims to address the discrepancy in the availment of Input Tax Credit and rectify any errors made in the assessment order. Issue 5: Disposal of the writ petition and related matters The writ petition, along with associated matters, is disposed of based on the terms outlined in the judgment. No costs are awarded in this case, and the related applications are closed. The High Court's decision focuses on providing a procedural remedy to address the petitioner's concerns regarding the tax liability and the lack of a reasonable opportunity in the initial order. This detailed analysis of the judgment covers the issues involved comprehensively, outlining the key legal aspects and procedural steps taken by the High Court to address the challenges raised by the petitioner.
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