2024 (4) TMI 103 - HC - GST

Taxpayer Wins Challenge Against GST Assessment Order Due to Procedural Defects, Ordered Fresh Hearing with Partial Tax Payment

M/s. K.R. Contractor, Rep. by its Partner, Abdul Aziz Kairullah Versus The Deputy State Tax Officer - II, Chennai

HC ruled in favor of petitioner challenging GST assessment order. Court found procedural irregularities in tax assessment, specifically lack of personal ... Validity Of assessment order - No opportunity of personal hearing - tax demand - pre-GST period - notice in Form ASMT-10 issued alleging discrepancies in returns - HELD THAT:- The operative portion of the impugned assessment order clearly indicates that the tax liability was confirmed by disregarding the objections of the petitioner that the receipts in Form 26AS pertain to the pre-GST period. The relevant Form 26AS is on record and prima facie indicates that some of the receipts pertain to the pre-GST periods. In these circumstances, the interest of justice demands that the petitioner should be heard. Solely for this reason, the impugned assessment order warrants interference, albeit by putting the petitioner on terms. Accordingly, the impugned assessment order is quashed subject to the condition that the petitioner remits 10% of the disputed tax demand as agreed to within a maximum period of two weeks from the date of receipt of a copy of this order. Subject to being satisfied that 10% of the disputed tax demand was received, the assessing officer is directed to provide a reasonable opportunity, including a personal hearing, and thereafter issue a fresh assessment order in accordance with law within a maximum period of two months thereafter. W.P. is disposed of on the above terms. Issues involved: Challenge to assessment order under GST statutes, discrepancies in returns, principles of natural justice, personal hearing, tax liability confirmation based on Form 26AS, interference with assessment order, remittance of disputed tax demand, fresh assessment order.Summary:1. The petitioner, a civil contractor registered under GST, challenged an assessment order alleging discrepancies in returns. A notice in Form ASMT-10 was issued followed by a show cause notice, to which the petitioner replied with relevant documents. The impugned assessment order was issued based on the entire receipts shown in the profit and loss account attributed to the GST period. 2. The assessing officer concluded tax liability based on Form 26AS, disregarding the petitioner's explanation that it does not represent taxable turnover. The petitioner submitted audited financial documents, but no personal hearing was granted. The petitioner offered to remit 10% of the disputed tax demand for a remand.3. The respondent, through the Government Advocate, argued that natural justice principles were followed, offering a personal hearing which the petitioner did not avail. The assessment order confirmed tax liability despite objections regarding pre-GST period receipts in Form 26AS.4. The Court noted that while a personal hearing was offered, the petitioner was not heard. Considering the nature of civil works contracts involving mobilization advances, the assessment order was interfered with to ensure the petitioner's right to be heard, quashing the order with a condition of remitting 10% of the disputed tax demand.5. The Court directed the assessing officer to provide a reasonable opportunity, including a personal hearing, and issue a fresh assessment order within two months upon receiving the remittance. The petition was disposed of with no costs, closing related motions.