Natural justice in input tax mismatch disputes led to conditional remand and defreezing of the bank account.
An assessment concerning alleged mismatch of input tax claim was set aside for breach of natural justice, as the taxpayer had not been given an effective opportunity to place supporting records showing no mismatch between GSTR-3B and GSTR-1. The dispute was remanded for fresh adjudication on condition that 10% of the disputed tax is deposited within the stipulated time, after which objections and documents may be filed, a fresh notice issued, personal hearing granted, and a fresh order passed within the prescribed time. Consequential relief was also indicated by directing defreezing of the bank account.
Issues: (i) Whether the assessment order deserved to be set aside for violation of principles of natural justice in a dispute concerning alleged mismatch of input tax claim. (ii) Whether the matter should be remanded for fresh consideration with a condition and whether consequential relief for freezing of the bank account should be granted.
Issue (i): Whether the assessment order deserved to be set aside for violation of principles of natural justice in a dispute concerning alleged mismatch of input tax claim.
Analysis: Notice had been issued, but the petitioner explained that the matter was being handled by its accountant and that relevant documents were available to support the defence that there was no mismatch between GSTR-3B and GSTR-1. The order was imposed without effective participation by the petitioner, and the dispute was capable of being reconsidered on the basis of the material sought to be produced.
Conclusion: The impugned order was set aside on the ground that the petitioner should be afforded an effective opportunity to present its case.
Issue (ii): Whether the matter should be remanded for fresh consideration with a condition and whether consequential relief for freezing of the bank account should be granted.
Analysis: To maintain consistency with a similar matter, the dispute was directed to be reconsidered afresh after the petitioner deposited 10% of the disputed tax amount within the stipulated time. On compliance, the petitioner was to file objections and documents, followed by a fresh notice, personal hearing, and a fresh order within the prescribed time. Since the writ petition was allowed, the freezing of the bank account also required correction.
Conclusion: The matter was remanded for fresh adjudication subject to deposit of 10% of the disputed tax amount, and the respondent was directed to defreeze the petitioner's bank account.
Final Conclusion: The petitioner obtained substantive relief by way of setting aside of the impugned order, remand for fresh consideration, and release of the bank account, though the remand was made conditional upon partial deposit.
TaxTMI 
AI Drafter ✕
TaxTMI 
