2024 (2) TMI 1287 - HC - GST

GST Assessment Order Invalidated Due to Procedural Flaws, Trader Granted Opportunity to Respond and Reapply

HC quashed the GST assessment order against a wholesale and retail trader who had voluntarily cancelled their GST registration. The court found procedural ... Violation of principles of natural justice - Validity of assessment order - order was passed without providing an opportunity to raise objections with regard to such assessment - cancellation of the GST registration - non-payment of GST arrears - HELD THAT:- The order of cancellation of registration was issued on 23.11.2022 pursuant to an application made by the petitioner on 10.10.2022. The final return is on record, and this document clearly indicates that such return was filed after the cancellation of registration on 17.03.2023. Nonetheless, in view of the cancellation of registration, it is likely that the petitioner would not have reason to access the portal in the manner that a registered person would be required to. In any event, the assessment order discloses that the petitioner did not participate in proceedings culminating in such assessment order. For this limited reason, the impugned order warrants interference. The matter is remanded for re-consideration by the first respondent. The petitioner is directed to submit a reply to the show cause notice in Form DRC- 01 within a maximum period of two weeks from the date of receipt of a copy of this order - Petition disposed off. Issues involved:The issues involved in the judgment are the validity of an assessment order, cancellation of GST registration, and the opportunity for the petitioner to participate in the assessment proceedings.Validity of Assessment Order:The petitioner challenged an assessment order and subsequent proceedings, claiming lack of opportunity to object to the assessment. The petitioner, engaged in wholesale and retail trade of bags, applied for GST registration cancellation on 10.10.2022, which was accepted and cancelled on 23.11.2022. Despite this, the petitioner received demand notices for GST arrears in December 2023, along with the assessment order dated 13.07.2023. The petitioner contended that the assessment order was issued without providing a chance to raise objections. The court noted that the petitioner did not participate in the assessment proceedings, leading to interference with the impugned order.Cancellation of GST Registration:The petitioner voluntarily applied for the cancellation of GST registration on 10.10.2022, which was approved on 23.11.2022. The petitioner argued that after cancellation, there was no reason to access the GST portal, where subsequent notices were allegedly issued without the petitioner's knowledge. The court acknowledged the cancellation and the petitioner's lack of participation in the assessment process, leading to the quashing of the assessment order and related notices.Opportunity for Petitioner in Assessment Proceedings:The petitioner's counsel highlighted that the order of cancellation of registration showed no tax dues, indicating the petitioner's compliance. The respondent argued that the petitioner had access to the GST portal, as evidenced by the filing of a final return on 17.03.2023. However, the court considered that the petitioner, post-cancellation, might not have actively accessed the portal. Consequently, the court directed the petitioner to reply to the show cause notice within two weeks and instructed the assessing officer to issue a fresh assessment order within two months after providing a reasonable opportunity, including a personal hearing to the petitioner.Separate Judgment:No separate judgment was delivered by the judges in this case.