Return mismatch demands require meaningful hearing when reconciliation documents are filed and liability has already been recovered.

A tax demand arising from a mismatch between GSTR-3B and auto-populated GSTR-2A was found to require reconsideration where the assessee had filed the annual return in Form GSTR-9 and the reconciliation statement in Form GSTR-9C, and the tax, interest and penalty had already been recovered from the bank account. In these circumstances, the impugned assessment and rectification rejection were set aside, and the matter was remanded for fresh adjudication on merits after allowing a reply and granting a reasonable opportunity, including personal hearing.

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Issues: Whether the assessment order and the order rejecting rectification required interference and remand where the tax demand arose from a mismatch between the GSTR-3B return and the auto-populated GSTR-2A, the annual return and reconciliation statement had been filed, and the entire demand had already been appropriated.

Analysis: The dispute turned on a return mismatch and the availability of supporting annual return and reconciliation documents. The material on record showed that the petitioner had placed the annual return in Form GSTR-9 and reconciliation statement in Form GSTR-9C, while the entire liability towards tax, interest and penalty had already been recovered from the bank account. In these circumstances, a fresh opportunity to contest the demand on merits was warranted.

Conclusion: The impugned order was set aside and the matter was remanded for reconsideration with liberty to file a reply and with a requirement of reasonable opportunity, including personal hearing, before a fresh assessment order is passed.

Final Conclusion: The dispute was restored to the adjudicating authority for a fresh decision on merits after affording the petitioner an effective opportunity of hearing.

Ratio Decidendi: Where a tax demand based on a return mismatch is supported by filed reconciliation documents and the liability has already been appropriated, the affected party should be given a meaningful opportunity to contest the demand before fresh adjudication.

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