2024 (7) TMI 99 - HC - GST

Tax Dispute Resolution: Partial Payment Required, Respondent Must Provide Fair Hearing and Issue New Order Within 90 Days

HC set aside tax order challenging GSTR discrepancies, directing petitioner to remit 10% of disputed tax demand and submit reply to show cause notice. ... Principles of natural justice - Remand for fresh consideration - Condition precedent of deposit for remand - Mismatch between GSTR 1 and GSTR 3B - Right to file representation and personal hearingRemand for fresh consideration - Condition precedent of deposit for remand - Right to file representation and personal hearing - Mismatch between GSTR 1 and GSTR 3B - Impugned order confirming tax proposal set aside and matter remanded on conditions permitting the assessee to contest the alleged mismatch between GSTR 1 and GSTR 3B - HELD THAT: - The impugned order dated 16.04.2024 confirmed the tax proposal solely on the ground that the petitioner failed to upload a reply to the show cause notice dated 14.12.2023. Although the show cause notice and the petitioner's initial request for time had been issued and recorded, the Court held that the interest of justice required affording the petitioner an opportunity to contest the demand on merits. Accordingly, the confirmation is set aside on the condition that the petitioner remit 10% of the disputed tax demand within two weeks of receipt of this order and submit a reply to the show cause notice within the same period. Upon receipt of the petitioner's reply and verification that the stipulated deposit has been made, the respondent must provide a reasonable opportunity to the petitioner, including a personal hearing, and thereafter pass a fresh order within three months from receipt of the reply. The remedy is procedural in nature, directed to ensure adjudication on merits of the alleged mismatch between the GSTR 1 and GSTR 3B for the transactions of November and December 2017.Impugned order set aside; remand granted on condition that the petitioner deposits 10% of the disputed tax demand within two weeks and files a reply; respondent to provide hearing and pass fresh order within three months of receipt of the reply and deposit.Final Conclusion: Writ petition disposed of by setting aside the impugned order and remitting the matter for fresh consideration on the petitioner making the agreed deposit of 10% and filing a reply; respondent to afford hearing and decide the matter within three months; no order as to costs. Issues: Challenge to order on inability to upload reply to show cause notice, disparity between GSTR 1 and GSTR 3B, compliance with principles of natural justice, setting aside the impugned order, remittance of disputed tax demand, providing opportunity to contest tax demand, disposal of writ petition.In this case, the petitioner challenged an order dated 16.04.2024, citing inability to upload a reply to a show cause notice. The show cause notice was issued on 14.12.2023, prompting the petitioner to explain the disparity between the GSTR 1 statement and the GSTR 3B return. The petitioner requested time to reply on 12.01.2024 but failed to upload the response. The petitioner claimed that the mismatch arose from inadvertently uploading only specific transactions in the GSTR 1 statement. The petitioner agreed to remit 10% of the disputed tax demand as a condition for remand.The Government Advocate contended that principles of natural justice were followed in issuing the show cause notice and the subsequent order. The impugned order confirmed the tax proposal due to the petitioner's failure to respond to the show cause notice. However, the court found that justice required providing an opportunity for the petitioner to contest the tax demand on merits. Consequently, the impugned order was set aside on the condition that the petitioner remits 10% of the disputed tax demand within two weeks and submits a reply to the show cause notice within that period.Upon receipt of the petitioner's reply and satisfaction of the remittance, the respondent was directed to provide a reasonable opportunity, including a personal hearing, to the petitioner. A fresh order was to be issued within three months from the date of receiving the petitioner's reply. The writ petition was disposed of without costs, and connected miscellaneous petitions were closed. The judgment aimed to uphold principles of natural justice while ensuring a fair opportunity for the petitioner to contest the tax demand based on the disparity between the GSTR 1 and GSTR 3B returns.