2024 (7) TMI 856 - HC - GST

Tax Assessment Challenge: Petitioner Wins Right to Comprehensive Hearing and Evidence Submission Under Rule 142(3)

HC found merit in petitioner's challenge to tax assessment order. The court set aside the original order, directing respondent to provide fresh ... Demand with regard to the disparity between the e-way bills reflected in the e-way bill portal and the petitioner's GSTR 3B returns - assessment periods running from 2018-19 to 2020-21 - HELD THAT:- The petitioner was called upon to show cause with regard to the disparity between the data reflected in the e-way bills portal and the outward supply value reflected in the petitioner's GSTR 3B returns. By reply dated 27.02.2024, the petitioner stated that such disparity is on account of the non-taxable supplies reflected in the e-way bills portal. It also appears that supporting documents were not annexed to the reply dated 27.02.2024 - In the show cause notice, the respondent did not refer to the returns filed by the petitioner in Form ITC -04, whereas, such returns were the basis for confirming the tax proposal to the extent specified therein. Since the petitioner was put on notice with regard to larger issue of mismatch, the petitioner could have provided a comprehensive explanation. Therefore, it is necessary to put the petitioner on terms. The impugned order dated 28.03.2024 is set aside on condition that the petitioner remits a sum of Rs. 3,50,00,000/-towards the disputed tax demand within six weeks from the date of receipt of a copy of this order. The petitioner is also permitted to submit a reply to the show cause notice along with all relevant documents during the said period - Petition disposed off. Issues involved:Challenge to order in original dated 28.03.2024 regarding disparity between e-way bills and GSTR 3B returns for assessment periods from 2018-19 to 2020-21.Analysis:The petitioner received a demand letter highlighting the disparity between e-way bills and GSTR 3B returns. The petitioner replied to show cause notices and submitted additional replies, stating that the mismatch was due to non-taxable supplies reflected in the e-way bills portal. The petitioner also mentioned that the requirement of filing Form ITC-04 was not applicable for a specific period. The petitioner agreed to remit a sum towards the disputed tax demand if given a reasonable time.The respondent contended that the petitioner was provided a reasonable opportunity to show cause, and their replies were duly considered. However, subsequent replies with annexed supporting documents were submitted after the impugned order.The court observed that the show cause notice did not refer to the returns filed in Form ITC-04, which were crucial for confirming the tax proposal. The court set aside the impugned order on the condition that the petitioner remits the disputed tax demand within six weeks and submits a comprehensive reply with relevant documents. 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 the receipt of the petitioner's reply.It was clarified that amounts paid by the petitioner pursuant to the impugned order would abide by the outcome of the remanded proceedings. The writ petition was disposed of with no order as to costs, and the connected miscellaneous petition was closed.