Tax Assessment Order Invalidated Due to Procedural Irregularities, Fresh Notice to Be Issued Within 45 Days

HC quashed tax assessment order for 2018-19, finding violation of natural justice. Directed respondent to issue fresh show cause notice within 45 days, allowing petitioner 30 days to respond. Order mandated respondent to pass new assessment order within two months, ensuring petitioner's right to be heard. Writ Petition allowed without costs.

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Issues:
Challenge to impugned order for assessment year 2018-19.

Analysis:
The petitioner challenged the impugned order dated 27.04.2024 passed by the respondent for the assessment year 2018-19. The respondent confirmed tax due from the petitioner along with interest and penalty. The petitioner contended that the demanded amount was not part of the notice issued earlier, and the respondent did not provide proper notice regarding the defect in the claim. The respondent argued that the petitioner failed to provide necessary documents to substantiate the Input Tax Credit claim.

The Court found that the impugned order violated the principles of natural justice as the petitioner was not properly notified of the defect in the claim. The Court noted the specific defect related to the Input Tax Credit claim and the conditions stipulated for claiming ITC in GSTR 3B. It was observed that the petitioner did not possess all the required documents and failed to comply with the eligibility provisions for ITC. Consequently, the excess claimed Input Tax Credit was ordered to be reversed.

The Court quashed the impugned order and directed the respondent to pass a fresh order on merits. The impugned order was treated as a corrigendum to the earlier notice, and the respondent was instructed to issue a fresh show cause notice within 45 days. The petitioner was given 30 days to respond, and the respondent was required to pass a fresh order expeditiously, preferably within two months, ensuring the petitioner's right to be heard.

In conclusion, the Writ Petition was allowed with the above directions, and no costs were awarded. The connected miscellaneous petitions were closed as a result of the judgment.

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