2024 (5) TMI 183 - HC - GST

Tax Assessment Challenged: Procedural Flaws Expose Gaps in 2017-2019 Orders, Petitioner Granted Opportunity to Substantiate Claims

The HC found procedural irregularities in tax assessment orders for 2017-2018 and 2018-2019. The court set aside the impugned orders, granting the ... Violation of principles of natural justice - Officer merely rejected the submissions of the petitioner without any reasoning - tax confirmed on the petitioner in terms of the proposals contained in DRC-01 issued to the petitioner, which preceded a notice in DRC-01A for the respective Assessment Years - HELD THAT:- The impugned orders set aside by giving the petitioner a fresh opportunity to substantiate the case afresh by filing a detailed reply to the respective notices issued to him in DRC-01. The impugned order, which stands quashed shall be treated as Corrigendum to the notice issued to the petitioner for the respective Assessment Years under DRC-01. The petitioner shall file reply within a period of 30 days from the date of receipt of a copy of this order. The petitioner shall also pay 10% of the disputed tax for the respective Assessment Years. For the Assessment Year 2017-2018, while arriving at 10% of the disputed tax, the amount paid by the petitioner as tax for the Assessment Year 2017-2018, shall be excluded and on the balance amount, the petitioner shall pay 10% of the disputed tax within a period of 30 days. Petition allowed. Issues involved: Challenge to impugned orders for Assessment Years 2017-2018 and 2018-2019 on grounds of violation of natural justice and ignoring payments made by petitioner.Summary:Violation of Principles of Natural Justice:The petitioner challenged the impugned orders for the Assessment Years 2017-2018 and 2018-2019, citing a violation of principles of natural justice. It was contended that the amounts paid by the petitioner were disregarded, and tax was confirmed based on proposals in DRC-01 issued prior to notices in DRC-01A. The petitioner's counsel highlighted deficiencies in the impugned order and pointed out that submitted documents during the personal hearing were not properly considered, with the Officer rejecting submissions without providing reasoning.Decision and Fresh Opportunity:After hearing arguments from both parties, the Court decided to set aside the impugned orders. The petitioner was granted a fresh opportunity to substantiate the case by filing a detailed reply to the respective notices issued in DRC-01. The impugned order was quashed and treated as a corrigendum to the notice, requiring the petitioner to respond within 30 days and pay 10% of the disputed tax for the respective Assessment Years. The petitioner was instructed to exclude the amount already paid as tax for 2017-2018 when calculating the 10% payment. The first respondent was directed to schedule a hearing, during which the petitioner must present all relevant records and provide a proper explanation. Fresh orders on merits were to be issued within 30 days following the hearing.Conclusion:The Writ Petitions were allowed with no costs imposed, and connected Miscellaneous Petitions were closed as a result of the judgment.