High Court Quashes GST Penalty Order, Directs Respondent to Review Documents and Provide Fair Hearing to Petitioner

HC allowed writ petition challenging GST penalty. Court set aside the impugned order due to lack of physical communication of notice and directed respondent to review petitioner's documents. Petitioner required to appear with supporting documents on 05.03.2024. Matter remanded for fresh consideration without imposing costs.

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Issues involved:
The issues involved in this case include discrepancies found on the returns filed by the petitioner for the assessment year 2022-2023, imposition of penalty on the petitioner for non-willful misstatement under Section 73 of TNGST Act, 2017, lack of physical communication of notice and orders to the petitioner, and the petitioner's readiness to submit required documents to substantiate their claim.

Summary:

Issue 1 - Discrepancies on returns and imposition of penalty:
The petitioner, a works contractor registered under the GST Act, 2017, faced discrepancies on the returns filed for the assessment year 2022-2023. Consequently, a notice was issued by the respondent imposing a penalty on the petitioner for non-willful misstatement. The petitioner challenged this order through a writ petition.

Issue 2 - Lack of physical communication of notice and orders:
The petitioner argued that the notice and the impugned order were issued through the portal without physical communication, leading to the petitioner being unaware of the same until February 2024. The petitioner contended that they possess the necessary documents to refute the discrepancies and are willing to produce them before the respondent.

Judgment:
Upon considering the submissions, the Court found merit in the petitioner's contentions. Citing the precedent set by the Division Bench of the Gujarat High Court, which emphasized the physical dispatch of show-cause notices and orders, the Court allowed the writ petition. The impugned order was set aside, and the matter was remanded back to the respondent for fresh consideration. The petitioner was directed to appear before the respondent with the required documents on 05.03.2024. The respondent was instructed to review the documents and pass fresh orders promptly. No costs were awarded, and connected Miscellaneous Petitions were closed.

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