Tax Assessment Order Quashed: Procedural Flaw Leads to Revised Hearing with Rs. 10 Lakh Payment Directive HC found a procedural irregularity in tax assessment order. The court set aside the original order, directing the petitioner to pay Rs. 10,00,000 within ...
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Tax Assessment Order Quashed: Procedural Flaw Leads to Revised Hearing with Rs. 10 Lakh Payment Directive
HC found a procedural irregularity in tax assessment order. The court set aside the original order, directing the petitioner to pay Rs. 10,00,000 within three weeks and submit a reply to the show cause notice. The respondent must provide a fair hearing and issue a revised order within three months, effectively giving the petitioner an opportunity to address the tax liability concerns.
Issues involved: Challenge to an order based on breach of natural justice and non-application of mind.
Summary: The petitioner challenged an order dated 29.12.2023 on grounds of breach of natural justice and non-application of mind. The proceedings were initiated after an inspection at the petitioner's registered place of business. The petitioner did not respond to the show cause notice as it was uploaded on the GST portal without direct communication. The impugned order imposed tax liability based on the wrong financial statements, leading to an incorrect taxable turnover. The petitioner argued that the order showed a lack of proper consideration.
The Government Advocate pointed out that the petitioner admitted liability for some issues but did not respond to the show cause notice. The balance sheets for 31.03.2018 and 31.03.2019 showed different amounts payable to creditors. The court noted that the respondent should have considered the 2018 financial statement for assessment instead of the 2019 statement. The petitioner's reason for not responding promptly was deemed insufficient, emphasizing the obligation to monitor the GST portal regularly.
Upon agreement from the petitioner, the court set aside the impugned order on the condition that the petitioner remits Rs. 10,00,000 towards the disputed tax demand within three weeks. The petitioner was allowed to submit a reply to the show cause notice within this period. Once the payment and reply were received, the respondent was directed to provide a fair opportunity for the petitioner, including a personal hearing, and issue a fresh order within three months.
The writ petition was disposed of without costs, and connected miscellaneous petitions were closed.
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