Tax Proposal Struck Down: Insufficient Hearing Opportunity Leads to Remand with Partial Tax Deposit and Fresh Review

HC allowed the writ petition challenging a tax proposal, finding insufficient opportunity for contesting. The court remanded the matter to the tax authority, directing the petitioner to deposit 10% of disputed tax, submit a reply, and receive a personal hearing. The respondent must issue a fresh order within three months, with no costs awarded.

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Issues:
Challenge to tax proposal due to lack of reasonable opportunity for contesting.

Analysis:
The case involves a writ petition challenging an order dated 01.11.2023 on the grounds of the petitioner not having a reasonable opportunity to contest the tax proposal. The petitioner, engaged in buying and selling domestic appliances, claimed that a supplier issued invoices in November 2018 and later canceled them by issuing credit notes, for which the petitioner did not avail Input Tax Credit (ITC). The petitioner's counsel referred to GSTR-3B returns to support the claim of not availing ITC. It was argued that the show cause notice was not responded to as it was uploaded on the GST portal but not communicated through any other means.

The Government Advocate representing the respondent contended that the petitioner was provided with sufficient opportunity through a notice in Form ASMT-10, a show cause notice, and a personal hearing. The tax proposal was based on scrutiny of GSTR-2A and the issuance of credit notes by the supplier. The court, upon reviewing the impugned order and the petitioner's GSTR-3B returns, found it necessary to remand the matter for reconsideration, putting the petitioner on terms.

Consequently, the High Court set aside the order dated 01.11.2023 and remanded the matter to the respondent for reconsideration, with the condition that the petitioner remits 10% of the disputed tax demand within two weeks. The petitioner was allowed to submit a reply to the show cause notice within the specified period. The respondent was directed to provide a reasonable opportunity to the petitioner, including a personal hearing, and issue a fresh order within three months from receiving the petitioner's reply. The writ petition was disposed of with no order as to costs, and connected miscellaneous petitions were closed.

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