Tax Dispute Resolved: Petitioner Allowed Additional Evidence Submission, Directed to Pay Partial Tax Pending Review

HC resolved tax dispute by remanding case to tax authorities. Petitioner granted opportunity to submit additional evidence of goods movement, required to pay 20% of disputed tax. Attachment order lifted. Authorities directed to provide personal hearing and issue fresh order within two months. Case disposed without costs.

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Issues:
Petitioner's lack of reasonable opportunity to contest tax demand on merits.

Analysis:
The petitioner received a show cause notice for allegedly wrongly availing Input Tax Credit (ITC) for the tax period 2017-2018. The petitioner responded to the notice by providing original tax invoices, bank statement, ledger account, and relevant returns of the supplier and the petitioner. The impugned order was issued on 30.08.2023.

The petitioner claimed unawareness of the impugned order as GST compliances were managed by a tax consultant. The petitioner only became aware of the order upon receiving an attachment order for the bank account on 18.03.2024.

The petitioner sought another opportunity to present relevant documents and contest the tax claim on merits, agreeing to remit 20% of the disputed tax demand as a condition for remand.

The Government Advocate pointed out that three reminders for personal hearing were issued to the petitioner after the petitioner's initial reply. The advocate highlighted the lack of submission of documents by the petitioner to establish the actual movement of goods.

Upon review, it was noted that while the petitioner submitted various documents, proof of actual movement of goods such as e-way bills, lorry receipts, and weighment slips were missing. The tax proposal was confirmed mainly due to the absence of evidence of goods movement. The court decided to set aside the impugned order and remand the matter for reconsideration, with the petitioner required to remit 20% of the disputed tax demand within two weeks.

The petitioner was allowed to submit additional documents within the specified period to prove actual movement of goods. Once satisfied with the documents and receipt of the remitted amount, the 1st respondent was directed to provide a reasonable opportunity for the petitioner, including a personal hearing, and issue a fresh order within two months.

As a result of setting aside the impugned order, the attachment order was lifted. The writ petition was disposed of without costs, and connected miscellaneous petitions were closed.

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