Tax Demand Order Overturned: Petitioner Granted Fresh Opportunity to Contest Disputed Assessment with Procedural Fairness and Revised Timeline

HC allowed petitioner's challenge to tax demand order. Court set aside original order and directed tax authorities to provide fresh opportunity for contesting tax demand within 15 days. Respondent must issue new order within 3 months after receiving petitioner's response. Previously debited amounts will be subject to final proceedings outcome, ensuring principles of natural justice are followed.

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Issues:
1. Lack of reasonable opportunity to contest tax demand on merits due to alleged non-communication of notices.
2. Debiting of significant amounts from the petitioner's bank account.
3. Compliance with principles of natural justice in issuing notices.
4. Mismatch in GSTR returns leading to tax proposal confirmation without petitioner's participation.
5. Setting aside the impugned order and providing an opportunity for the petitioner to respond to the show cause notice.

Analysis:
1. The writ petition challenges an order dated 26.08.2023, alleging that the petitioner was not given a fair chance to contest the tax demand on merits. The petitioner claims that notices were uploaded on the GST portal but not communicated through other means, leading to unawareness of the proceedings.

2. The petitioner's counsel highlights that significant amounts were debited from the petitioner's bank account post the impugned order, constituting more than 50% of the disputed tax demand, raising concerns about the fairness of the process.

3. The respondent, represented by the Additional Government Pleader, asserts that principles of natural justice were followed by issuing intimation, show cause notice, and a reminder notice on specific dates, indicating compliance with procedural requirements.

4. The impugned order was based on a tax proposal concerning a discrepancy between the petitioner's GSTR 3B return and the auto-populated GSTR 2A, particularly regarding Input Tax Credit (ITC). The order was confirmed due to the petitioner's non-response to the show cause notice and absence at the personal hearing, attributed to alleged unawareness of the proceedings.

5. In the interest of justice, the court sets aside the impugned order, allowing the petitioner to reply to the show cause notice within 15 days. The respondent is directed to grant a reasonable opportunity, including a personal hearing, and issue a fresh order within three months from receiving the petitioner's response. Any amounts already debited shall be subject to the outcome of the revised proceedings.

This comprehensive analysis covers the issues raised in the judgment, detailing the arguments presented by both parties and the court's decision to provide a fair opportunity for the petitioner to contest the tax demand on merits.

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