GST Tax Dispute: Procedural Gaps Challenged, Partial Relief Granted with Deposit and Fresh Order Mandate

HC analyzed a GST tax dispute involving procedural and substantive tax compliance issues. Despite time-bar arguments and procedural non-compliance, the court granted partial relief by quashing the impugned order and remitting the case back to the tax authority. The petitioner was directed to deposit a specified amount and file a reply, with the authority mandated to pass fresh orders within three months, ensuring principles of natural justice.

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Issues:
1. Time bar in filing the Writ Petition.
2. Tax liability due to differences in GSTR 1, GSTR 2A, and GSTR 3B.
3. Failure to file a reply to notices prior to the impugned order.
4. Appellate remedy being time-barred under Section 107 of GST Enactments.
5. Granting partial relief to the petitioner by quashing the impugned order and remitting the case back to the respondent.

Issue 1: Time bar in filing the Writ Petition
The petitioner approached the court long after the impugned order was passed in GST DRC 07 dated 16.08.2023. The respondent argued that the Writ Petition was time-barred and should be dismissed due to latches, citing a Supreme Court decision. However, the court considered the petitioner's case on merits and decided to grant partial relief.

Issue 2: Tax liability due to differences in GSTR 1, GSTR 2A, and GSTR 3B
The court noted the tax liability confirmed against the petitioner due to differences between GSTR 1 and GSTR 3B, as well as GSTR 2A and GSTR 3B. The amounts confirmed included tax balance, penalty balance, and interest balance for both sets of differences, totaling to significant amounts. The petitioner, running a small grocery shop, requested an opportunity to explain the case, highlighting the challenges faced in responding to notices posted on the GST common portal.

Issue 3: Failure to file a reply to notices prior to the impugned order
The petitioner admitted to failing to file a reply to the notices issued before the impugned order, attributing it to the notices being posted on the GST common portal. This failure was a point of contention in the case, with the respondent opposing the petitioner's request for an opportunity to explain the case.

Issue 4: Appellate remedy being time-barred under Section 107 of GST Enactments
The respondent argued that the appellate remedy was time-barred under Section 107 of the GST Enactments, citing relevant Supreme Court decisions. This argument was presented as a basis for dismissing the Writ Petition. However, the court, after considering the arguments from both sides, decided to grant partial relief to the petitioner by quashing the impugned order and remitting the case back to the respondent for fresh orders.

Issue 5: Granting partial relief to the petitioner by quashing the impugned order and remitting the case back to the respondent
After considering the submissions from both parties, the court decided to quash the impugned order and remit the case back to the respondent. The petitioner was required to deposit a specified amount to the credit of the respondent before fresh orders could be passed. The impugned order was to be treated as an addendum to the show cause notice, and the petitioner was given a deadline to file a reply to the notice. The court emphasized the need for expeditious handling of the case, with fresh orders expected within three months, ensuring the petitioner's right to be heard before the final decision. The Writ Petition was allowed with the provided directions, and no costs were imposed.

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