Tax Assessment Overturned: Procedural Flaws Invalidate Order, Authorities Directed to Rectify Deficiencies and Ensure Fair Hearing

HC allowed the writ petition challenging tax assessment due to procedural irregularities. The court set aside the original order, directing tax authorities to provide proper notice and personal hearing. Petitioner must remit 10% of disputed tax demand and submit reply within specified timeframe. Respondent instructed to reconsider the tax proposal and issue a fresh order within three months, ensuring principles of natural justice are followed.

---

---

Issues involved:
Challenge on breach of principles of natural justice due to lack of communication of show cause notice, mismatch between GSTR 1 and GSTR 3B returns, compliance with principles of natural justice, reconsideration of tax proposal due to petitioner's unawareness of proceedings.

Analysis:

1. The petitioner challenged an order dated 29.12.2023, citing a breach of principles of natural justice. The petitioner claimed that the show cause notice and other communications were only uploaded on the GST portal, not directly communicated, leading to unawareness of the proceedings until the receipt of a recovery notice on 25.04.2024.

2. The petitioner's counsel argued that the tax proposal was based on a mismatch between the petitioner's GSTR 1 and GSTR 3B returns. The petitioner expressed willingness to explain the mismatch if given an opportunity and agreed to remit 10% of the disputed tax demand for remand.

3. The Government Advocate for the respondent contended that principles of natural justice were followed by issuing a show cause notice on 19.09.2023 and offering a personal hearing to the petitioner.

4. Upon examination, it was found that the tax proposal was confirmed as the petitioner did not respond to the show cause notice or provide relevant documents. Considering the petitioner's claim of unawareness hindering participation, the court deemed it necessary to set aside the impugned order for reconsideration, with the petitioner required to remit 10% of the disputed tax demand within two weeks.

5. The court directed the petitioner to submit a reply to the show cause notice within the specified period. Upon receipt of the reply and confirmation of the remittance, the respondent was instructed to provide a reasonable opportunity for a personal hearing and issue a fresh order within three months.

6. Consequently, the court disposed of the writ petition on the condition of remittance and reconsideration, without imposing any costs, and closed connected miscellaneous petitions.

---