2024 (7) TMI 1036 - HC - GST

Taxpayer Wins Challenge: Order Overturned for Procedural Fairness, Fresh Notice to Be Issued Within 90 Days

M/s. V.S.R. Agro Products, Represented by its Partner, Sri. M.C. Vijayan Versus The Assistant Commissioner (ST), Krishnagiri.

HC allowed petitioner's challenge to tax order. Court set aside original order dated 17.10.2023 due to lack of reasonable opportunity to contest demand. ... Violation of principles of natural justice - petitioner did not have a reasonable opportunity to contest the total demand on merits - petitioner asserts that he was unaware of proceedings culminating in the impugned order because the show cause notice and other communications were uploaded on the GST portal in the “View Additional Notices and Orders” tab and not communicated to the petitioner through any other mode - HELD THAT:- On perusal of the impugned order, it is evident that the tax proposal was confirmed because the petitioner did not file any written objection or attend the personal hearing. By taking into account the assertion that such non participation was on account of not being aware of proceedings, the matter requires reconsideration. It should also be noticed that the petitioner discharged the entire tax and interest demand. The impugned order dated 17.10.2023 is set aside subject to verification of the payment made by the petitioner under Form DRC-03 on 30.10.2023. The petitioner is permitted to submit a reply to the show cause notice within 15 days from the date of receipt of a copy of this order - Petition disposed off. Issues Involved:1. Lack of reasonable opportunity to contest total demand on merits due to non-communication of proceedings.2. Allegation of mismatch between GSTR 3B returns and auto-populated GSTR 2A leading to tax proposal.3. Compliance with principles of natural justice in issuing notices and offering a personal hearing.4. Reconsideration of the impugned order due to non-participation by petitioner and subsequent payment of entire tax and interest demand.5. Setting aside the impugned order, verification of payment, submission of reply to show cause notice, providing a reasonable opportunity, and issuing a fresh order within a specified timeframe.Analysis:1. The petitioner challenged an order dated 17.10.2023, alleging a lack of reasonable opportunity to contest the total demand on merits. The petitioner claimed unawareness of the proceedings leading to the impugned order as notices were uploaded on the GST portal without direct communication. The petitioner sought reconsideration based on this ground.2. The tax proposal arose from a mismatch between the petitioner's GSTR 3B returns and the auto-populated GSTR 2A. The petitioner, after the issuance of the impugned order, paid the entire demand towards tax and interest. The petitioner argued that Section 74 requirements were not met, and the respondent did not adhere to Section 126(4) of GST statutes. These contentions necessitated reconsideration of the matter. A submission was made for the respondent to act accordingly.3. The Government Advocate representing the respondent confirmed that the proceedings originated from scrutiny of the petitioner's returns, following due process by issuing necessary notices and offering a personal hearing. The principles of natural justice were maintained throughout the proceedings, as evidenced by the issuance of notices and the opportunity for a personal hearing.4. Upon reviewing the impugned order, it was noted that the tax proposal was confirmed due to the petitioner's failure to file written objections or attend the personal hearing. Considering the petitioner's claim of non-awareness of the proceedings as the reason for non-participation, the court deemed it necessary to reconsider the matter, especially since the petitioner had cleared the entire tax and interest demand subsequently.5. The court set aside the impugned order dated 17.10.2023, subject to verifying the payment made by the petitioner. The petitioner was granted 15 days to respond to the show cause notice and provide an opportunity for a personal hearing. The respondent was directed to issue a fresh order within three months from receiving the petitioner's reply. The writ petition was disposed of without costs, and connected miscellaneous petitions were closed as a result of the judgment.