Tax Order Overturned: Procedural Flaws Expose Unfair Assessment, Petitioner Granted Hearing and Right to Respond

HC allowed petitioner's challenge to tax order due to procedural irregularities. Court set aside original order and directed respondent to provide personal hearing, permit petitioner to submit reply to show cause notice within two weeks, and issue fresh order within three months. Petitioner required to remit 10% of disputed tax demand as condition of remand.

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Issues:
Challenge based on breach of principles of natural justice due to lack of communication of show cause notice and impugned order through any mode other than portal. Violation of sub-section (2) of Section 74 of GST enactments regarding timing of impugned order. Excess payment by petitioner as evidenced in portal screenshot. Compliance with principles of natural justice by respondent through issuance of intimation, show cause notice, and personal hearing notice. Discrepancy between petitioner's GSTR 3B and 1 returns for financial year 2017-2018. Need for reconsideration of impugned order due to lack of hearing. Setting aside of impugned order and remand for reconsideration on condition of remitting 10% of disputed tax demand. Permission for petitioner to submit reply to show cause notice within two weeks. Direction for respondent to provide reasonable opportunity for personal hearing and issue fresh order within three months.

Analysis:
The petitioner challenged an order primarily on the grounds of breach of principles of natural justice, claiming unawareness of a show cause notice and the impugned order due to lack of communication through any means other than being uploaded on a portal. The petitioner contended that the impugned order violated sub-section (2) of Section 74 of relevant GST enactments and highlighted an excess payment made, as evidenced in a portal screenshot. The petitioner expressed readiness to remit 10% of the disputed tax demand for remand.

The respondent, represented by learned Additional Government Pleader, argued that principles of natural justice were adhered to through the issuance of an intimation, show cause notice, and a personal hearing notice. The impugned order revealed a tax proposal related to a discrepancy between the petitioner's GSTR 3B and 1 returns for the financial year 2017-2018. The respondent accepted the need for verification regarding the additional tax remitted by the petitioner and acknowledged the necessity for reconsideration of the order due to the absence of a hearing.

Consequently, the court set aside the impugned order and remanded the matter for reconsideration, imposing a condition for the petitioner to remit 10% of the disputed tax demand within two weeks. The petitioner was granted permission to submit a reply to the show cause notice within the specified period. The respondent was directed to provide a reasonable opportunity for a personal hearing and issue a fresh order within three months upon receipt of the petitioner's reply. The writ petition was disposed of without costs, and connected miscellaneous petitions were closed.

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