2024 (8) TMI 244 - HC - GST

Violation of principles of natural justice - petitioner did not have a reasonable opportunity to contest the tax demand on merits - SCN and other communications were merely uploaded on the GST portal and not communicated to the petitioner through any other mode - mismatch between the petitioner's GSTR 3B and 1 returns - HELD THAT - On examining the impugned order, it is clear that the tax proposal was confirmed because the tax payer neither paid the amounts demanded nor filed any objections. By taking into account the assertion that such non participation was on account of not being aware of proceedings since communications were uploaded on the GST portal, the interest of justice warrants reconsideration by putting the petitioner on terms. The impugned order dated 27.11.2023 is set aside 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. The petitioner is permitted to submit a reply to the show cause notice within the aforesaid period. Petition disposed off by way of remand.

Summary

Issues: Challenge to tax demand due to lack of reasonable opportunity for contesting, compliance with principles of natural justice, satisfaction of Section 74 of GST statutes.

Analysis:

1. The writ petition challenges an order dated 27.11.2023, asserting that the petitioner was not given a reasonable opportunity to contest the tax demand on merits. The petitioner claims that crucial communications, such as the show cause notice, were only uploaded on the GST portal and not directly communicated, leading to unawareness and non-participation in the proceedings.

2. The petitioner's counsel argues that the confirmed tax proposal is based on discrepancies between the GSTR 3B and 1 returns, contending that Section 74 of the GST statutes is not applicable in this case. The petitioner agrees to pay 10% of the disputed tax demand as a condition for reconsideration.

3. The Government Advocate representing the respondent asserts that principles of natural justice were followed, citing the issuance of intimation, show cause notice, and a personal hearing notice. He argues that the petitioner's failure to pay taxes on reported supplies in GSTR 1 amounts to suppression of facts, justifying the tax proposal confirmation.

4. Upon scrutiny, it is evident that the tax proposal was confirmed due to the taxpayer's non-payment and lack of objections. Recognizing the petitioner's claim of non-awareness of proceedings, the court deems it necessary to set aside the order and allow the petitioner to remit 10% of the disputed tax demand within two weeks for reconsideration.

5. Consequently, the impugned order is overturned with the condition of payment and submission of a reply to the show cause notice within two weeks. The respondent is directed to provide a fair opportunity, including a personal hearing, and issue a fresh order within three months of receiving the petitioner's reply.

6. The writ petition is disposed of without costs, with connected petitions closed, ensuring that the petitioner receives a fair chance to contest the tax demand based on principles of natural justice and procedural fairness.