2024 (7) TMI 1509 - HC - GST

Challenge to assessment order - violation of principles of natural justice - the impugned order was issued about nine months after the show cause notice without providing any further opportunity to the petitioner - HELD THAT - A reply dated 04.02.2023 is on record. Such reply does not address the issue raised in the show cause notice. Since the tax proposal was confirmed without the petitioner being heard, the interest of justice warrants that an opportunity be provided to the petitioner to contest the tax demand on merits after putting the petitioner on terms. On instructions, learned counsel for the petitioner submits that the petitioner agrees to remit 10% of the disputed tax demand as a condition for remand. The impugned order dated 06.10.2023 is set aside and the matter is remanded for reconsideration 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. Within the aforesaid period, the petitioner is permitted to submit a reply to the show cause notice - Petition disposed off.

Summary

Issues:
Challenge to assessment order based on breach of principles of natural justice in GST matter.

Detailed Analysis:

1. Breach of Principles of Natural Justice:
The petitioner challenged an assessment order dated 06.10.2023 on grounds of breach of principles of natural justice. The petitioner, engaged in textile business under the composition scheme of applicable GST enactments, argued that the order was issued nine months after the show cause notice without providing further opportunity to contest the tax demand on merits. The petitioner contended that liability cannot be imposed solely based on a comparison of auto-populated GSTR 2A and return in Form GST CMP 08. The court acknowledged the lack of opportunity for the petitioner to be heard before confirming the tax proposal.

2. Failure to Address Show Cause Notice:
The respondent pointed out that the petitioner failed to provide a detailed explanation regarding the sales turnover and total value of purchases as per auto-populated GSTR 2A. Despite a reply dated 04.02.2023, the response did not address the issue raised in the show cause notice. Consequently, the tax proposal was confirmed without affording the petitioner a chance to contest the tax demand on merits.

3. Remand for Reconsideration:
In light of the above, the court set aside the impugned order dated 06.10.2023 and remanded the matter for reconsideration. The petitioner agreed to remit 10% of the disputed tax demand as a condition for remand. The court directed the petitioner to submit a reply to the show cause notice within two weeks of receiving the order. Upon receipt of the reply and confirmation of the remittance, the respondent was instructed to provide a reasonable opportunity to the petitioner, including a personal hearing, and issue a fresh order within three months.

4. Disposition of Writ Petition:
The writ petition was disposed of with the mentioned terms, without imposing any costs. Connected miscellaneous petitions were closed accordingly, bringing the legal proceedings to a conclusion.

This detailed analysis of the judgment highlights the issues raised, the arguments presented by both parties, and the court's decision, ensuring a comprehensive understanding of the legal matter at hand.