Natural justice in input tax mismatch disputes: assessment set aside and remanded for fresh hearing after compliance with pre-deposit condition.

A tax demand based on an alleged mismatch in input tax credit was interfered with because the assessee had not been given an effective opportunity to place its reply and supporting material before the authority. The HC noted that the matter had been handled through a consultant who did not attend the hearing, and that a meaningful hearing was necessary before fastening liability. The assessment order was therefore set aside and the matter remanded for fresh adjudication, subject to compliance with the stipulated pre-deposit condition and after granting opportunity of reply and personal hearing.

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Issues: Whether the assessment order confirming tax liability for alleged mismatch of input tax claim deserved to be set aside for violation of natural justice and remitted for fresh consideration after affording an effective opportunity of hearing.

Analysis: The petitioner asserted that the reply and supporting documents were available but were not effectively placed before the authority because the matter was being handled by a consultant who did not attend the hearing. The impugned order fastened a substantial tax liability, and the record indicated a dispute relating to mismatch between GSTR-2A and GSTR-3B. In view of the need to afford a meaningful opportunity and to maintain consistency with a similar course adopted in another matter, the impugned order was considered liable to be interfered with and the matter was directed to be reconsidered after compliance with a condition of pre-deposit.

Conclusion: The assessment order was set aside and the matter was remanded to the authority for fresh adjudication on compliance with the stipulated condition and after granting opportunity of reply and personal hearing.

Ratio Decidendi: Where a tax demand is passed without an effective opportunity to place relevant material on record, the order may be set aside and the matter remitted for fresh consideration after granting a meaningful hearing.

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