2024 (6) TMI 830 - HC - GST

Trader Wins GST Challenge: Partial Tax Payment, Fresh Assessment Allowed with Fair Hearing Opportunity

HC quashed the GST assessment order against a trader whose registration was cancelled. The court directed the petitioner to pay 10% of disputed tax ... Quashing of assessment order - Opportunity to be heard / Natural justice - Remand for fresh assessment subject to compliance - Condonation for non-access to electronic portal due to cancellation of registration - Interim condition of deposit as precondition for reconsiderationQuashing of assessment order - Opportunity to be heard / Natural justice - Condonation for non-access to electronic portal due to cancellation of registration - Impugned assessment order quashed and petitioner entitled to opportunity to contest the tax demand. - HELD THAT: - The Court found that the assessment order dated 22.08.2023 proceeded despite the petitioner not being heard, although personal hearings had been offered. The petitioner's GST registration had been cancelled with effect from 01.04.2020, which reduced the incentive to monitor the GST portal and was relevant to the petitioner's engagement with electronic processes. In view of the absence of a hearing and to secure compliance with principles of natural justice, the impugned assessment order was quashed to enable the petitioner to contest the demand. The Court exercised supervisory jurisdiction to set aside the assessment insofar as it was passed without affording a proper opportunity to be heard, while recording that multiple notices had been issued after cancellation of registration but treating the lack of hearing as determinative for quashing the order.Assessment order quashed and petitioner granted an opportunity to contest the tax demand.Remand for fresh assessment subject to compliance - Interim condition of deposit as precondition for reconsideration - Matter remitted to assessing officer for fresh assessment subject to specified conditions and timelines. - HELD THAT: - The Court remanded the matter for fresh consideration rather than deciding the tax liability on merits. The petitioner agreed to remit 10% of the disputed tax demand as a condition for reconsideration. The Court directed that the petitioner shall remit 10% of the disputed demand within two weeks of receipt of the order's copy and may submit a reply to the show cause notice dated 06.07.2023 within the same period. Upon satisfaction of receipt of the 10% remittance and receipt of the petitioner's reply, the assessing officer is to provide a reasonable opportunity including a personal hearing and thereafter pass a fresh assessment order within two months. These directions remand the issue of assessment for fresh adjudication subject to compliance with the stated conditions.Matter remanded to the assessing officer for fresh assessment on receipt of 10% of the disputed demand and after affording opportunity to the petitioner, with a two-month timeline for passing fresh assessment.Final Conclusion: Writ petition allowed in part: the assessment order dated 22.08.2023 is quashed and the matter is remitted to the assessing officer for fresh assessment on compliance with the condition that the petitioner deposits 10% of the disputed tax demand and is afforded a reasonable opportunity, including personal hearing; timelines for compliance and disposal prescribed by the Court. Issues:The issues involved in the judgment are the challenge to an assessment order dated 22.08.2023, cancellation of GST registration, lack of access to GST portal, absence of notice in Form ASMT-10, and the petitioner's request to remit 10% of the disputed tax demand for re-consideration.Cancellation of GST Registration:The petitioner, engaged in retail and wholesale trading of cereals, had her GST registration cancelled from 01.04.2020. The impugned assessment order was issued on 22.08.2023 following a show cause notice dated 06.07.2023. The petitioner claims she did not have access to the GST portal due to the registration cancellation.Absence of Notice and Lack of Access to GST Portal:The petitioner's counsel argued that the petitioner was not familiar with computer resources and did not receive a notice in Form ASMT-10 prior to the impugned proceedings. The petitioner agreed to pay 10% of the disputed tax demand for re-consideration.Contentions and Opportunities Provided:The Government Advocate pointed out that the petitioner had multiple opportunities as evidenced by the impugned order and subsequent notices post GST registration cancellation. Despite personal hearings being offered, the petitioner was not heard during the assessment process.Judgment and Relief Granted:The court quashed the assessment order, allowing the petitioner to contest the tax demand. The petitioner was directed to remit 10% of the disputed tax demand within two weeks and submit a reply to the show cause notice. Upon compliance, the assessing officer was instructed to provide a reasonable opportunity, including a personal hearing, and issue a fresh assessment order within two months. The case was disposed of with no costs incurred, and related motions were closed accordingly.