Reasonable opportunity in GST mismatch cases led to remand, with demand set aside and fresh hearing directed on terms.

A tax demand arising from a mismatch between GSTR-3B and auto-populated GSTR-2A was challenged on the ground that no effective reply was received to the show cause notice. The Madras High Court found that the taxpayer should be given a reasonable opportunity to contest the demand on merits, and the assessment was set aside with a remand for fresh consideration on terms. The taxpayer was required to remit 10% of the disputed tax demand and file a detailed reply with supporting documents, after which the authority had to grant a reasonable opportunity, including personal hearing, and pass a fresh order. The garnishee order was also set aside.

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Issues: Whether the assessment order confirming the tax demand was liable to be set aside for want of reasonable opportunity and the matter remanded for fresh consideration.

Analysis: The dispute arose from a tax proposal based on mismatch between GSTR-3B and auto-populated GSTR-2A. The order was passed because no reply was received to the show cause notice. The Court found that the petitioner should be afforded an opportunity to contest the demand on merits, but only on terms. It directed the petitioner to remit 10% of the disputed tax demand and to submit a detailed reply with supporting documents, after which the respondent was to grant a reasonable opportunity, including personal hearing, and pass a fresh order.

Conclusion: The assessment order was set aside and the matter was remanded for reconsideration on payment of 10% of the disputed tax demand; the garnishee order was also set aside.

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