2024 (6) TMI 1251 - HC - GST

Tax Assessment Challenged: Petitioner Wins Right to Respond, Respondent Ordered to Issue Fresh Notice Within 90 Days

HC ruled in favor of petitioner challenging tax assessment order. Court set aside the original order and granted petitioner two weeks to respond to show ... Violation of principles of natural justice - petitioner did not have a reasonable opportunity to contest the tax demand on merits - SCN and impugned order were uploaded in the “view additional notices and orders” tab on the GST portal, but not communicated through any other mode - HELD THAT:- On perusal of the impugned order, it is evident that the tax proposal was confirmed solely because the petitioner did not reply to the show cause notice. In view of the assertion that the petitioner could not participate in the proceedings on account of being unaware of the same, the interest of justice warrants that the petitioner be provided an opportunity to contest the tax demand on merits. The petitioner has placed on record evidence that a sum of Rs. 8,35,000/- was debited from the bank account on 19.06.2024. Therefore, to that extent, revenue interest is secured. The impugned order dated 18.12.2023 is set aside subject to verification of the debit of a sum of Rs. 8,35,000/-. The petitioner is permitted to file a reply to the show cause notice within two weeks from the date of receipt of a copy of this order. Issues:Assessment order challenged for lack of opportunity to contest tax demand.Analysis:The petitioner contested an assessment order dated 18.12.2023, claiming inadequate opportunity to challenge the tax demand. The petitioner argued that despite the show cause notice and impugned order being uploaded on the GST portal, they were not communicated through any other means. The tax proposal was based on a discrepancy between the petitioner's GSTR 3B returns and auto-populated GSTR 2A, resulting in a debit of Rs. 8,35,000 from the petitioner's bank account on 19.06.2024.Analysis:The Government Advocate for the respondent contended that principles of natural justice were followed, with intimation issued on 18.09.2023, show cause notice on 25.09.2023, and a personal hearing notice by 08.12.2023. However, upon reviewing the impugned order, it was noted that the tax proposal was confirmed due to the petitioner's failure to respond to the show cause notice. As the petitioner claimed unawareness of the proceedings, justice demanded providing an opportunity to contest the tax demand. The petitioner's evidence of the debit of Rs. 8,35,000 was crucial in securing revenue interest.Analysis:Consequently, the impugned order dated 18.12.2023 was set aside pending verification of the Rs. 8,35,000 debit. The petitioner was granted two weeks to reply to the show cause notice, following which the respondent was directed to offer a reasonable opportunity, including a personal hearing, and issue a fresh order within three months. It was clarified that the amount debited from the petitioner's bank account would be subject to the outcome of the proceedings.Analysis:The case was disposed of under the mentioned terms, with no costs incurred. The related motions were closed accordingly.