2024 (2) TMI 1129 - HC - GST

Tax Assessment Order Quashed: Petitioner Granted Hearing, Authority Ordered to Reconsider with Fresh Evaluation Within Two Months

M/s. Shree Shyama Traders, Represented by its Partner Mr. Ashok Kumar Agarwal Versus The Assistant Commissioner (ST), The Branch Manager

HC quashed the assessment order and bank attachment order, remanding the matter for reconsideration. The petitioner was granted two weeks to respond to ... Validity of assessment order and bank attachment order - Input Tax Credit (ITC) availed of by the petitioner was reversed on the ground that three suppliers had issued credit notes to the petitioner - HELD THAT:- The admitted position is that the entire demand under the assessment order of Rs. 2,82,760/- was satisfied by way of the remittance made by the bank to the tax department. Consequently, revenue interest is fully protected at this juncture. If the contention of the petitioner that no supplies were effected by Abhishek Steel Industries Limited is found to be correct, the reversal of ITC to that extent may warrant revision. Solely for this reason, the impugned order calls for interference. The impugned assessment order dated 11.08.2023 is quashed and the matter is remanded for re-consideration by the first respondent. The petitioner is permitted to submit a reply to the show cause notice dated 11.07.2023 within a maximum period of two weeks from the date of receipt of a copy of this order - Petition allowed by way of remand. Issues involved: Challenge to assessment order and bank attachment order.Issue 1: Assessment Order and Bank Attachment OrderThe petitioner challenged an assessment order dated 11.08.2023 and the consequential bank attachment order dated 18.11.2023, claiming regularity in filing returns and lack of awareness regarding certain notices until receiving the bank attachment order. The petitioner filed a writ petition seeking relief in light of these circumstances.Issue 2: Reversal of Input Tax Credit (ITC)The petitioner's counsel highlighted that the ITC availed by the petitioner was reversed due to credit notes issued by three suppliers, including MahamayaIspat, A Division of Abhishek Steel Industries Limited, from which the petitioner did not purchase any products during the relevant period. The counsel argued that if the petitioner had known about the proceedings, relevant facts could have been presented. The bank attachment order appropriated Rs. 3,39,674/-, leading to the challenge.Issue 3: Government's Position and Reversal of ITCThe Additional Government Pleader stated that the reversal of ITC was based on auto-populated GSTR-2A information from the portal, defending the decision and claiming no grounds for interference. The petitioner's contention regarding the supplies from Abhishek Steel Industries Limited potentially impacting the ITC reversal was acknowledged, suggesting a possible revision based on this aspect.Judgment:The High Court quashed the assessment order dated 11.08.2023 and remanded the matter for reconsideration by the first respondent. The petitioner was granted two weeks to reply to the show cause notice dated 11.07.2023, with the first respondent directed to provide a reasonable opportunity for a personal hearing and issue a fresh assessment order within two months. The retained amounts from the assessment order were to be subject to the outcome of the remanded proceedings. The case was disposed of with no costs, and related motions were closed accordingly.