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

HC quashed the assessment order and bank attachment order, remanding the matter for reconsideration. The petitioner was granted two weeks to respond to the show cause notice, with the tax authority directed to provide a personal hearing and issue a fresh assessment order within two months. Retained amounts were to be subject to the remanded proceedings' outcome, with no costs awarded.

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Issues involved: Challenge to assessment order and bank attachment order.

Issue 1: Assessment Order and Bank Attachment Order
The 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 ITC
The 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.

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