GST mismatch dispute remanded for fresh adjudication after opportunity to reply, subject to conditional payment of part of demand

GST demand based on an alleged mismatch between GSTR-3B and auto-populated GSTR-2A was set aside because the taxpayer had not been given an effective opportunity to contest the notices on merits. The Court held that the interest of justice required a fresh adjudication with reasonable opportunity and personal hearing, while balancing compliance concerns by making remand conditional on payment of 10% of the disputed demand after adjusting any amount already paid. The petitioner was then permitted to file a reply and seek reconsideration of the input tax credit claim.

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Issues: Whether the order confirming the GST demand for alleged mismatch between GSTR-3B and auto-populated GSTR-2A, passed without effective response from the petitioner, should be set aside and the matter remanded for fresh consideration.

Analysis: The tax proposal was confirmed because the petitioner did not respond to the notices issued in the proceedings. The petitioner asserted that there was no effective opportunity to contest the demand on merits and sought an opportunity to justify the input tax credit claim. The Court found that the interest of justice required a further opportunity, while balancing the need for compliance by directing payment of a portion of the disputed demand as a condition for remand.

Conclusion: The impugned order was set aside subject to the petitioner remitting 10% of the disputed tax demand after adjusting any amount already paid, with liberty to file a reply and receive a fresh adjudication after reasonable opportunity and personal hearing.

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