Assessment Order Quashed; GST Transition Case Remanded for Reconsideration with New Hearing and Fresh Decision.

The HC quashed the impugned assessment order concerning the transition of purchase tax to the GST regime. The matter was remanded for reconsideration, allowing the petitioner to respond to the show cause notice within two weeks. The assessing officer must provide a reasonable opportunity, including a personal hearing, and issue a fresh assessment order within two months. The amount previously appropriated from the petitioner's bank account will be retained pending the outcome of the remanded proceedings. The writ petition was disposed of with no order as to costs.

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Issues involved:
The challenge to an assessment order regarding transition of purchase tax to GST regime and failure to reference petitioner's reply in the assessment order.

Issue 1 - Transition of Purchase Tax to GST Regime:
The petitioner, a registered dealer under the Tamil Nadu Value Added Tax Act, challenged an assessment order claiming that a sum of Rs. 1,33,123/- paid as purchase tax was eligible for transition to the GST regime under Section 140 of applicable GST statutes. The petitioner received a show cause notice in February 2020 and responded stating the eligibility for transitional credit. However, the impugned assessment order did not reference the petitioner's reply and the explanation provided therein. The entire demand of Rs. 4,52,341/-, including tax, interest, and penalty, was recovered from the petitioner's bank account.

Issue 2 - Failure to Reference Petitioner's Reply in Assessment Order:
The Additional Government Pleader pointed out that the petitioner failed to respond to the show cause notice or avail of a personal hearing, leading to the issuance of the impugned order. The show cause notice dated 23.02.2023 offered a personal hearing to the petitioner, but the impugned order did not mention the petitioner's earlier reply from February 2020. Despite the recovery of Rs. 4,55,013.70 from the petitioner's bank account, more than the total amount due under the assessment order, revenue interest was fully secured. The court found that the impugned order needed interference to provide an opportunity to the petitioner.

Judgment:
The court quashed the impugned assessment order and remanded the matter for reconsideration. The petitioner was allowed to submit a reply to the show cause notice within two weeks. The assessing officer was directed to provide a reasonable opportunity to the petitioner, including a personal hearing, and issue a fresh assessment order within two months of receiving the reply. The amount appropriated from the petitioner's bank account was to be retained pending the outcome of the remanded proceedings. The writ petition was disposed of with no order as to costs.

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