Tax Demand Order Quashed Due to Procedural Defect, Petitioner Granted Fair Hearing and 10% Tax Remittance Directive

HC set aside tax demand order after finding lack of reasonable opportunity for the petitioner to contest merits. Court mandated 10% tax remittance and directed respondent to issue fresh order within three months, providing petitioner opportunity to present arguments. Judgment emphasized principles of natural justice and procedural fairness in tax dispute resolution.

---

---

Issues:
Challenge to tax demand due to lack of reasonable opportunity for contesting, Compliance with principles of natural justice, Mismatch between GSTR 3B return and GSTR 2A, Remittance of 10% disputed tax demand, Setting aside the impugned order, Providing opportunity for contesting tax demand, Fresh order issuance within three months.

Analysis:
The judgment addresses the issue raised by the petitioner regarding the lack of a reasonable opportunity to contest the tax demand on merits. The petitioner claimed unawareness of proceedings as the show cause notice and impugned order were uploaded on a portal without direct communication. The court acknowledged this claim and set aside the impugned order, emphasizing the importance of providing an opportunity for the petitioner to contest the tax demand on merits.

Regarding the mismatch between the petitioner's GSTR 3B return and auto-populated GSTR 2A, the court noted that the tax proposal was confirmed due to the petitioner's failure to file objections or avail of a personal hearing opportunity. The petitioner expressed willingness to remit 10% of the disputed tax demand as a condition for remand, which was accepted by the court. This condition was set for the petitioner to have a chance to contest the tax demand on merits.

The judgment also highlighted the compliance with principles of natural justice by the respondent, who issued intimation, show cause notice, and a personal hearing notice. Despite this, the court found it necessary to provide the petitioner with a fresh opportunity to contest the tax demand, ensuring fairness and adherence to procedural requirements.

In conclusion, the impugned order was set aside with the condition of remitting 10% of the disputed tax demand. The petitioner was granted the opportunity to submit a reply to the show cause notice within a specified period. Upon satisfaction of the remittance and receipt of the petitioner's reply, the respondent was directed to provide a reasonable opportunity, including a personal hearing, and issue a fresh order within three months. The writ petition was disposed of without costs, bringing closure to the connected miscellaneous petitions.

---