2024 (7) TMI 1513 - HC - GST

Challenge to tax demand in order in original - 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 petitioner's reply, it is clear that the petitioner merely attached the GSTR 3B returns and stated that all taxes were paid. The petitioner was under an obligation to submit all relevant documents such as tax invoices, documents to establish movement of goods, bank statements with regard to payments made by the petitioner and proof, if any, of payment of taxes by the supplier. It is also, however, noticeable that only the summary of the order has been uploaded and such order indicates that the tax proposal was confirmed because no reply was filed. In these circumstance, reconsideration is necessary after putting the petitioner on terms. The impugned order dated 30.12.2023 is set aside and the matter is remanded for reconsideration on condition that the petitioner remits an additional 5% of the disputed tax demand within 15 days from the date of receipt of a copy of this order - petition disposed off by way of remand.

Summary

Issues:
Challenge of tax demand due to lack of reasonable opportunity for contesting the order in original.

Analysis:
The petitioner challenged an order dated 30.12.2023, claiming inadequate opportunity to contest the tax demand. The petitioner argued that despite filing GSTR 3B returns to discharge amounts due for supplies received, the detailed order was not uploaded on the portal. The petitioner became aware of the order only upon receiving a bank attachment notice. The petitioner sought another chance to contest the tax proposal on merits, stating readiness to pay an additional 5% of the disputed tax demand.

The Government Advocate contended that natural justice principles were adhered to through the issuance of a show cause notice and offering a personal hearing. However, she highlighted the petitioner's failure to provide a detailed reply and relevant documents to establish compliance with GST statutes. The petitioner's submission of only GSTR 3B returns was deemed insufficient, as additional documents such as tax invoices, proof of payments, and supplier tax payment evidence were necessary.

The Court observed that while the summary of the order indicated the tax proposal confirmation due to lack of a detailed reply, the full order was not uploaded. Considering the circumstances, the Court set aside the order and remanded the matter for reconsideration, with a condition for the petitioner to remit an extra 5% of the disputed tax demand. The petitioner was granted 15 days to submit a comprehensive reply with all relevant documents. Upon receiving the reply and being satisfied with the payments, the first respondent was directed to provide a fair opportunity for the petitioner, including a personal hearing, and issue a fresh order within three months.

Consequently, the assessment order was annulled, and the bank attachment was lifted. The Writ Petition was disposed of with no costs, and related miscellaneous petitions were closed as well.