Natural justice in GST demand proceedings: assessment set aside and remanded for fresh hearing after partial payment.

A tax demand arising from mismatch between GSTR-3B and auto-populated GSTR-2A was set aside where the assessee had not been given an effective hearing before confirmation. The Court held that the matter should be reconsidered on merits after allowing a reply and granting a reasonable opportunity of hearing, including personal hearing, while balancing revenue interests by requiring payment of 10% of the disputed demand as a condition for remand.

---

---

Issues: Whether the assessment order confirming the tax demand, passed without effective participation by the assessee, was liable to be set aside and the matter remanded for fresh consideration with an opportunity of hearing.

Analysis: The tax proposal arose from a mismatch between the GSTR 3B returns and the auto-populated GSTR 2A. The assessee contended that only eligible input tax credit had been claimed and sought an opportunity to contest the demand on merits. The order had been preceded by a show cause notice and reminders for personal hearing, but the decisive consideration was that the assessee had not been heard before the demand was confirmed. To balance the opportunity sought by the assessee with the need to secure the revenue, the Court directed remand on payment of 10% of the disputed demand and permitted a reply, followed by a fresh adjudication after reasonable opportunity, including personal hearing.

Conclusion: The assessment order was set aside and the matter was remanded for reconsideration, subject to payment of 10% of the disputed tax demand and compliance with the directions for reply and hearing.

---