Tax Assessment Order Invalidated: Procedural Flaws Require Fresh Hearing and Reconsideration of Evidence Within Two Months

HC found the tax assessment order dated 30.12.2023 unsustainable due to procedural irregularities. The court set aside the original order, remanded the matter for reconsideration, and directed the tax authority to provide the petitioner a reasonable opportunity to present evidence, including a personal hearing. A fresh order must be issued within two months after receiving the petitioner's reply.

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Issues involved: Challenge to order in original dated 30.12.2023 for assessment period 2017-18 in W.P. No.8559 of 2024 and challenge to order rejecting the rectification petition in W.P.No.8607 of 2024.

Impugned Order in Original (Issue 1): The first issue pertains to discrepancies between the GSTR 3B return and the auto-populated GSTR 2A return. The tax demand on the excess amount reflected in the GSTR 2A was confirmed, despite the petitioner's explanation in the reply to the show cause notice.

Impugned Order in Original (Issue 2): The second issue concerns the imposition of cess. The petitioner claimed that cess was paid in May 2018 along with applicable interest, supported by the relevant GSTR 3B return. However, the impugned order still imposed liability regarding the cess.

Impugned Order in Original (Issue 3): The third issue relates to the receipt of scrips by the petitioner. The petitioner clarified in response to the show cause notice that no Input Tax Credit (ITC) was availed of in relation to the scrips. Despite this, liability was imposed by treating it as taxable turnover.

Impugned Order in Original (Issue 4): The last issue concerns obligations undertaken by the petitioner for corporate social responsibility. Tax was imposed in relation to this activity, which involved drilling a bore well for a school.

Court's Decision: The Court found the impugned order dated 30.12.2023 unsustainable due to various discrepancies and lack of opportunity provided to the petitioner to address certain issues. The order was set aside in relation to the issues raised in the writ petition, and the matter was remanded to the respondent for reconsideration. The petitioner was granted two weeks to file a reply regarding the scrips issue, and the respondent was directed to provide a reasonable opportunity, including a personal hearing, and issue a fresh order within two months from the date of receiving the petitioner's reply. The Writ Petitions were disposed of with no order as to costs.

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