2024 (8) TMI 833 - HC - GST

Legal Challenge Overturned: Tax Assessment Invalidated Due to Procedural Errors, Fresh Evaluation Ordered with Partial Tax Deposit

HC of Madras nullified the assessment order for 2018-19 due to natural justice violations. The case is remanded to the respondent for a fresh assessment. ... Principles of natural justice - remand for fresh adjudication - treating order as addendum to show cause notice - discrepancy between GSTR-7 and GSTR-3B reporting - pre-deposit of disputed tax - alternative remedy under Section 107 of the GST ActPrinciples of natural justice - remand for fresh adjudication - discrepancy between GSTR-7 and GSTR-3B reporting - Impugned assessment order passed without prior notices and consequent violation of principles of natural justice - HELD THAT: - The Court found that the impugned order dated 12.02.2024 preceded the notices in DRC-01A (26.10.2023) and DRC-01 (15.11.2023), giving rise to a substantial procedural infirmity. Considering that the dispute principally concerns differences in turnover reported in GSTR-7 and GSTR-3B, the Court held that the petitioner may have a case on merits and that the procedural lapse warrants fresh consideration. In the exercise of writ jurisdiction the Court set aside the impugned order and remitted the matter to the 1st respondent for a fresh decision on merits, thereby affording the assessee an opportunity to be heard before adjudication proceeds. The availability of an alternative remedy under Section 107 of the GST Act was noted but the Court nonetheless directed remand for adjudication on merits.Impugned order quashed and matter remitted to the 1st respondent for fresh adjudication on meritsTreating order as addendum to show cause notice - pre-deposit of disputed tax - Procedural directions on manner of fresh adjudication and interim pre-deposit requirement - HELD THAT: - The Court directed that the quashed order shall be treated as an addendum to the earlier show cause notices in DRC-01A and DRC-01. The petitioner was directed to file a consolidated reply within thirty days from receipt of the order. As an interim condition for remand, the Court required the petitioner to deposit twenty percent of the disputed tax from electronic cash registered. These directions condition the remand and set the procedural framework for the fresh adjudication by the assessing authority.Impugned order to be treated as addendum to the show cause notices; petitioner to file consolidated reply within 30 days and deposit 20% of disputed tax from electronic cashFinal Conclusion: Writ petition allowed in part: the assessment order dated 12.02.2024 for assessment year 2018-19 is quashed and remitted to the assessing authority for fresh adjudication on merits; procedural directions require the petitioner to file a consolidated reply within thirty days and to deposit twenty percent of the disputed tax from electronic cash; no costs. The High Court of Madras set aside the impugned order for the assessment year 2018-19 due to a violation of natural justice principles. The case is remitted to the 1st respondent for a fresh order on merits. The petitioner must file a consolidated reply within 30 days and deposit 20% of the disputed tax.