Tax Authorities Must Provide Fair Hearing and Rectify GSTR Discrepancies Within 3 Months After Personal Consultation

HC allowed the writ petition challenging tax proceedings. The court set aside the order regarding GSTR discrepancies and ITC reversal, directing respondent to issue a fresh order within three months after providing petitioner a personal hearing. The matter was remanded for reconsideration without imposing costs.

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Issues Involved: Challenge to an order dated 29.09.2023 in a writ petition regarding proceedings initiated against the petitioner following an inspection.

Summary:
1. The petitioner challenged the order, highlighting two main issues. Firstly, the difference in turnover declared in GSTR 3B compared to the GSTR 1 statement, where the petitioner had paid the tax dues prior to the intimation date. Secondly, the reversal of Input Tax Credit (ITC) claimed in relation to purchases from a specific supplier, which the petitioner argued was used for machinery repairs and not for building paint as concluded in the impugned order.

2. The respondent imposed penalties due to the petitioner's failure to discharge liabilities towards CGST and SGST, despite partial payment made by the petitioner. The respondent's conclusion regarding the tax dues payment timeline and the misinterpretation of the purchases from the supplier were found to be contrary to the documents on record, rendering the impugned order unsustainable on these issues.

3. Consequently, the High Court set aside the impugned order concerning the GSTR discrepancies and ITC reversal issues, remanding the matter for reconsideration. The respondent was directed to issue a fresh order within three months, allowing the petitioner a reasonable opportunity for a personal hearing.

4. The writ petition was disposed of without costs, and connected miscellaneous petitions were closed accordingly.

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