2024 (7) TMI 1350 - HC - GST

Violation of principles of natural justice - non-service of SCN - petitioner has failed to notice the notices issued in Form - DRC - 01A dated 07.09.2023 and Form - DRC - 01 dated 12.10.2023, which had been uploaded in the GST Common Portal - Challenge to impugned order in Form GST DRC 07, dated 26.12.2023 passed for the Assessment Year 2017-2018 - HELD THAT - Although the respondent submits that the Writ Petition is devoid of merits in the light of the decision of the Hon'ble Supreme Court in ASSISTANT COMMISSIONER (CT) LTU, KAKINADA ORS. VERSUS M/S. GLAXO SMITH KLINE CONSUMER HEALTH CARE LIMITED 2020 (5) TMI 149 - SUPREME COURT , the petitioner can be given a partial reprieve in this Writ Petition by quashing the impugned order on terms. The petitioner shall deposit 25% of the disputed tax to the credit of the respondent from the Electronic Cash Register, within a period of 30 days from the date of receipt of a copy of this order. The impugned order which stands quashed in this order shall be treated as Addendum to the show cause notices already issued to the petitioner. The petitioner shall file a consolidated reply within a period of 30 days from today. This Writ Petition stands disposed of.

Issues Involved:

Validity of the impugned order, failure to respond to notices, discrepancy between GSTR-3B and GSTR-2A returns, time-barred appeal remedy, and quashing of the impugned order on terms.

Analysis:

Validity of the Impugned Order and Failure to Respond to Notices:

The petitioner, a small-time dealer engaged in the sale of textile products, challenged the impugned order in Form GST DRC-07 dated 26.12.2023, which confirmed the demand proposed in the notices in Form GST DRC-01A dated 07.09.2023 and Form DRC-01 dated 12.10.2023. The petitioner claimed that they failed to notice these notices, which were uploaded on the GST Common Portal, and were unaware of the impugned order until the Department sought to recover the amount.

Discrepancy between GSTR-3B and GSTR-2A Returns:

The petitioner submitted that the dispute arose purely due to a discrepancy between the returns filed by the petitioner in GSTR-3B and GSTR-2A. The petitioner claimed to have a good case to explain this discrepancy.

Time-Barred Appeal Remedy:

The petitioner argued that although they may have an appeal remedy, it is time-barred at this distant point in time, citing the decision of the Hon'ble Supreme Court in M/s.Singh Enterprises vs. Commissioner of Central Excise, Jamshedpur and others, (2008) 3 SCC 70.

Quashing of the Impugned Order on Terms:

Despite the learned Additional Government Pleader's submission that the Writ Petition is devoid of merits based on the decision in Assistant Commissioner (CT), LTU, Kakinada and others vs. Glaxo Smith Kline Consumer Health Care Limited, 2020 SCC OnLine SC 44, the Court decided to grant a partial reprieve to the petitioner by quashing the impugned order on the following terms:

The petitioner shall deposit 25% of the disputed tax to the credit of the respondent from the Electronic Cash Register within 30 days of receiving a copy of the order.
The impugned order shall be treated as an addendum to the show cause notices already issued to the petitioner.
The petitioner shall file a consolidated reply within 30 days.
Subject to the petitioner complying with the above requirements, the respondent shall proceed to pass fresh orders on merits and in accordance with law after hearing the petitioner within two months.
If the petitioner fails to either deposit or file a consolidated reply, the order shall be deemed withdrawn, and the Writ Petition shall be dismissed.

The Writ Petition was disposed of with the above observations and no costs were awarded. Connected Miscellaneous Petitions were closed.

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