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Tax Assessment Voided: Procedural Fairness Mandates Personal Hearing and Fresh Order with 10% Tax Deposit HC found breach of natural justice in tax proceedings. The court set aside the original order, directing the petitioner to remit 10% of disputed tax ...
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Tax Assessment Voided: Procedural Fairness Mandates Personal Hearing and Fresh Order with 10% Tax Deposit
HC found breach of natural justice in tax proceedings. The court set aside the original order, directing the petitioner to remit 10% of disputed tax demand and submit a reply. Respondent must provide a personal hearing and issue a fresh order within three months. Writ petition disposed of without costs, ensuring procedural fairness in tax assessment.
Issues: Breach of principles of natural justice in an order dated 18.08.2023.
Analysis: The petitioner, engaged in selling electrical and plumbing hardware, opted for the composition scheme and filed returns in Form GSTR 4 and CMP-08. The petitioner received a notice dated 15.07.2022 but claimed to be unaware of a subsequent show cause notice dated 28.11.2022 as it was only uploaded on the portal, not communicated through other means. The petitioner's counsel argued that the turnover reported in Form CMP-08 was not considered in the impugned order and requested another opportunity, agreeing to remit 10% of the disputed tax demand for a remand.
The respondent, represented by the Additional Government Pleader, contended that natural justice principles were adhered to by issuing intimation and the show cause notice. The impugned order considered a turnover different from what the petitioner reported, basing the tax proposal on non-response to the show cause notice. Recognizing the petitioner's claim of being unaware of the proceedings, the court deemed it necessary to provide an opportunity, setting aside the order subject to the condition of remitting 10% of the disputed tax demand within 15 days and submitting a reply within that period. Upon satisfaction of the remittance, the respondent was directed to offer a reasonable opportunity, including a personal hearing, and issue a fresh order within three months from receiving the petitioner's reply.
In conclusion, the writ petition was disposed of with no costs, and connected miscellaneous petitions were closed. The court's decision aimed to uphold principles of natural justice, ensuring a fair opportunity for the petitioner to address the tax dispute and participate in the proceedings effectively.
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