HC Strikes Down GST Assessment Order Due to Procedural Flaws, Mandates Fresh Hearing and Document Submission

HC set aside GST assessment order for 2017-18, finding procedural irregularities in tax calculation. The court remanded the matter, directing respondent to provide personal hearing and allow petitioner to submit additional documents within four weeks. Respondent must issue a fresh order within two months, ensuring statutory compliance and procedural fairness.

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Issues:
Challenge to assessment order under applicable GST enactments for assessment period 2017-18.

Analysis:
The petitioner, son of a deceased registered person under GST enactments, challenged an assessment order dated 30.12.2023 related to the business of buying and selling processed turmeric. The petitioner contended that the respondent wrongly invoked Section 74 of GST enactments and incorrectly assumed that the goods should have been sold within 18 months from purchase. The petitioner's father had filed nil returns for outward supplies in 2017-18, leading to the respondent treating total purchases as suppressed sales. However, the impugned order calculated tax liability based on a deemed sale in February 2019 without proper notice or personal hearing to the petitioner, violating statutory provisions.

The Government Advocate argued that there was a reasonable basis to proceed on suppression of sales due to nil returns filed by the petitioner's father. He also mentioned that the petitioner failed to provide evidence of closing stock as on 31.03.2018, which could have supported the claim of no sales in 2017-18. The show cause notice and impugned order differed in their approach, with the latter assuming a sale deadline of 18 months for processed turmeric without clear justification. The lack of notice on the deemed sale and absence of a personal hearing further weakened the validity of the impugned order.

The High Court, after considering the arguments, set aside the impugned order and remanded the matter to the respondent for reconsideration. The petitioner was granted four weeks to submit additional documents, and the respondent was directed to provide a reasonable opportunity, including a personal hearing, before issuing a fresh order within two months from receiving the additional documents. The court emphasized that all contentions remained open for the petitioner during the remanded proceedings.

In conclusion, the writ petition challenging the assessment order for the assessment period 2017-18 was disposed of with the above directions, ensuring procedural fairness and compliance with statutory requirements in the reconsideration process by the respondent.

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