Natural justice in GST assessment: order set aside and remanded where the assessee lacked effective participation and demand was already recovered.

Tax liability arising from a discrepancy between GSTR-3B and GSTR-1 was found to have been confirmed without effective participation by the assessee, even though the demanded amount had already been appropriated from the bank account. In these circumstances, revenue interest was treated as secured, and the assessee was held entitled to contest the demand on merits. The assessment order was set aside and the matter remanded for fresh consideration, with liberty to file a reply and obtain a personal hearing before a new order is passed.

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Issues: Whether the assessment order confirming tax liability without effective participation of the petitioner and after appropriation of the demanded amount from the bank account should be set aside and the matter remanded for fresh consideration.

Analysis: The tax demand arose from a discrepancy between the GSTR-3B and GSTR-1 returns. The petitioner was not shown to have effectively participated in the proceedings, while the entire liability had already been recovered by appropriating the amount from the bank account. In these circumstances, revenue interest stood secured and the petitioner was entitled to an opportunity to contest the demand on merits.

Conclusion: The impugned order was set aside and the matter was remanded for reconsideration with liberty to the petitioner to file a reply and receive a personal hearing before a fresh order is passed.

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