2024 (3) TMI 1030 - HC - GST

Taxpayer Wins Challenge Against GST Return Error, Secures Right to Fair Hearing and Reconsideration of Order

HC found petitioner's GST return error was inadvertent. Court quashed the impugned order and directed respondent to provide reasonable opportunity for ... Reasonable opportunity of hearing - reverse charge liability - correction in subsequent GST returns - remand for reconsideration - appropriation pending outcomeReasonable opportunity of hearing - reverse charge liability - correction in subsequent GST returns - Impugned order quashed on ground that the petitioner was not afforded a reasonable opportunity before the order was passed. - HELD THAT: - The Court found that proceedings arose from the petitioner's GSTR 1 for October 2019, wherein the petitioner inadvertently failed to indicate that GST was leviable on a reverse charge basis and subsequently corrected this mistake in GSTR 3B and annual GSTR 9. The petitioner stated it was unaware of the proceedings and therefore could not participate. Having regard to the absence of a reasonable opportunity and the petitioner's explanation supported by corrected returns and annexed documents, the Court concluded that the impugned order cannot stand and must be quashed to enable fresh consideration after providing the petitioner an opportunity to be heard. [Paras 2, 3, 4, 6, 7]Impugned order quashed for failure to afford a reasonable opportunity; matter set aside for fresh consideration.Remand for reconsideration - appropriation pending outcome - Matter remanded to the assessing authority for reconsideration with directions to afford a personal hearing and to pass a fresh order within a specified time; amounts appropriated to abide by the outcome. - HELD THAT: - The Court remitted the matter to the respondent for fresh consideration because the petitioner had not been heard and had filed corrected returns and supporting documents. The respondent is directed to provide a reasonable opportunity, including personal hearing, and to issue a fresh order within two months from receipt of the Court's order. The Court additionally clarified that sums appropriated from the petitioner's bank account pursuant to the impugned order shall remain subject to the result of the remanded proceedings. [Paras 5, 7]Remanded for reconsideration with a direction to afford personal hearing and decide afresh within two months; appropriated amounts to abide the outcome.Final Conclusion: Writ petition allowed by quashing the impugned order; matter remanded to the respondent for reconsideration after affording a reasonable opportunity including personal hearing and for passing a fresh order within two months; amounts appropriated pursuant to the impugned order shall abide the outcome; no order as to costs. Issues involved:The primary challenge is the lack of a reasonable opportunity provided to the petitioner in an order dated 28.07.2023.Details of the Judgment:Issue 1: Lack of Reasonable OpportunityThe petitioner, a registered person under applicable GST enactments engaged in the transport of goods, inadvertently failed to indicate GST leviable on services on a reverse charge basis in the GSTR 1 return for October 2019. Despite initiating proceedings related to the GSTR 1 return, the petitioner was unaware and could not participate until the impugned order was issued. The petitioner explained the error in a communication dated 22.01.2024 and requested another opportunity. The respondent had already appropriated the amount payable from the petitioner's bank account. The Court acknowledged the inadvertent error and the subsequent correction in the GSTR 3B and GSTR 9 returns. Consequently, the impugned order was quashed, and the matter was remanded to the respondent for reconsideration. The respondent was directed to provide a reasonable opportunity, including a personal hearing, and issue a fresh order within two months. The amounts appropriated shall abide by the outcome of the remanded proceedings.Conclusion:The writ petition was disposed of with no order as to costs, and connected miscellaneous petitions were closed.