Taxpayer Receives Second Chance to Address Tax Recovery Proceedings, Must Deposit 10% and Clarify GSTR-3B Input Tax Credit Discrepancies

HC granted petitioner a fresh opportunity to respond to tax recovery proceedings, requiring 10% deposit of disputed tax amount. The court directed respondent to issue a speaking order within three months, allowing petitioner to explain GSTR-3B filing discrepancies related to input tax credit. Order aims to provide fair hearing while maintaining tax compliance procedures.

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Issues Involved:
1. Recovery proceedings initiated by the respondent based on an impugned order demanding a specific sum.
2. Dispute regarding the filing of return in GSTR-3B by the petitioner.
3. Lack of cooperation from the petitioner in responding to notices and the impugned order being returned undelivered.
4. Court's decision on providing the petitioner with a fresh opportunity to reply to the show cause notice.

Analysis:

1. The petitioner filed a Writ Petition challenging recovery proceedings initiated by the respondent after an impugned order dated 26.12.2023 demanded a sum of Rs. 3,56,158/-, comprising CGST, SGST, and interest. The petitioner claimed that the dispute arose due to wrongly filing return in GSTR-3B by including input tax credit as RCM claimed instead of availing it under Table 4A(5).

2. The petitioner, described as a small Enterprise, argued that they were unaware of preceding notices and personal hearing notices. The petitioner's counsel requested an opportunity to explain the case, attributing the dispute to an erroneous entry made in Form GSTR-3B after the implementation of GST on 01.07.2017.

3. On the contrary, the respondent's counsel contended that the petitioner did not cooperate by failing to respond to the show cause notice or any personal hearing notices. Additionally, the impugned order dispatched to the petitioner was returned as 'Door locked,' indicating a lack of receptiveness from the petitioner.

4. After considering both parties' submissions, the Court decided to grant the petitioner a fresh opportunity to reply to the show cause notice in DRC 01, subject to depositing 10% of the disputed tax amount confirmed in the impugned order. The petitioner was instructed to file a reply treating the impugned order as an addendum to the show cause notice. The respondent was directed to pass a speaking order on merits within three months from the date of the Court's order, ensuring the petitioner's right to be heard.

This detailed analysis covers the issues involved in the judgment, providing a comprehensive overview of the legal proceedings and the Court's decision in the matter.

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