Tax Authority Must Reconsider GSTR Discrepancy After Petitioner Pays 10% Disputed Amount and Responds to Show Cause Notice

HC set aside tax order challenging GSTR 3B and GSTR 2A discrepancy. Court directed petitioner to pay 10% of disputed tax, submit reply to show cause notice. Respondent ordered to provide personal hearing and issue fresh order within three months. Writ petition disposed of without costs, ensuring fair opportunity for tax dispute resolution.

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Issues involved: Challenge to tax proposal based on discrepancy between GSTR 3B return and GSTR 2A, lack of communication of notices to petitioner, opportunity for petitioner to contest tax demand.

Summary:

Challenge to Tax Proposal:
The petitioner filed a writ petition challenging an order dated 11.10.2023, asserting lack of awareness of proceedings due to notices being uploaded on the GST portal without direct communication. The tax proposal in question related to a discrepancy between the petitioner's GSTR 3B return and auto-populated GSTR 2A, leading to an alleged wrongful availment of Input Tax Credit (ITC). The petitioner, through counsel, expressed willingness to remit 10% of the disputed tax demand for reconsideration. The impugned order was set aside, and the matter remanded for further review.

Communication of Notices:
The respondent, represented by Mrs. K. Vasanthamala, Government Advocate, contended that notices were duly issued, including an intimation in June 2023, a show cause notice in July 2023, and a personal hearing notice on 03.10.2023. Despite this, the petitioner claimed lack of communication, leading to the challenge of the order. The Court acknowledged the need for proper communication and opportunity for the petitioner to contest the tax demand.

Opportunity for Petitioner:
Upon perusal of the impugned order and considering submissions, the Court found it necessary to provide the petitioner with an opportunity to contest the tax demand. The petitioner was directed to remit 10% of the disputed tax demand within two weeks, submit a reply to the show cause notice, and upon satisfaction of payment, the respondent was directed to provide a reasonable opportunity for the petitioner, including a personal hearing, and issue a fresh order within three months.

Conclusion:
The writ petition was disposed of without costs, with the impugned order set aside for reconsideration based on the conditions outlined. The connected miscellaneous petitions were closed as a result of the judgment.

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