2024 (11) TMI 455 - HC - GST

Tax Dispute Resolved: Petitioner Wins Challenge Against GST Order with Right to Contest After Partial Payment

SC ruled in favor of the petitioner, finding a breach of natural justice in the GST case. The court quashed the original order, allowing the petitioner to ... Principles of natural justice - service by electronic notice/GST portal - Input Tax Credit reversal - quashing and remand for fresh assessment subject to interim deposit - opportunity of personal hearingPrinciples of natural justice - service by electronic notice/GST portal - opportunity of personal hearing - quashing and remand for fresh assessment subject to interim deposit - Impugned assessment order set aside for failure of effective participation and in order to afford the petitioner an opportunity to contest the demand - HELD THAT: - The Court recorded that notices and intimations had been uploaded on the GST portal but the petitioner did not participate in the proceedings and so did not place documents to contest the reversal of Input Tax Credit. Balancing the petitioner's interest and the revenue interest, the Court found interference warranted to afford an opportunity to contest the demand. The order was quashed, subject to the petitioner remitting 10% of the disputed tax demand within two weeks of receipt of the order and filing a reply within the same period. Upon receipt of the reply and after satisfaction that the interim remittance was received, the assessing officer was directed to accord a reasonable opportunity including a personal hearing and to pass a fresh assessment order within two months thereafter. [Paras 4, 5, 6]Impugned order quashed; petitioner to remit 10% of disputed demand and submit reply within two weeks; assessing officer to grant personal hearing and pass fresh assessment within two months after satisfaction of interim remittanceInput Tax Credit reversal - quashing and remand for fresh assessment subject to interim deposit - Merits of reversal of Input Tax Credit not finally adjudicated and remanded for fresh consideration - HELD THAT: - Although the petitioner asserted that purchases from the supplier were genuine and that supporting documents exist, the Court did not decide the substantive correctness of the ITC reversal on merits because the petitioner had not participated earlier. The matter was remitted to the assessing officer for fresh consideration on receipt of the petitioner's reply and after compliance with the interim remittance condition, so that the officer may examine the factual and documentary material and then decide the claim of genuineness of the transactions and entitlement to ITC. [Paras 4, 6]Substantive claim concerning reversal of Input Tax Credit remitted to assessing officer for fresh consideration after petitioner's interim remittance and opportunity to be heardFinal Conclusion: Writ petition allowed in part: the assessment order is quashed and the matter remanded for fresh assessment on terms - petitioner to remit 10% of disputed demand and file a reply within two weeks; assessing officer to provide hearing and pass a fresh order within two months thereafter. The petitioner challenged an order for breach of natural justice in a GST case involving Input Tax Credit. The court found that the petitioner was unaware of proceedings and quashed the order, allowing the petitioner to contest the tax demand by remitting 10% within two weeks. The assessing officer must provide a fresh assessment order within two months after receiving the reply. Case disposed of with no costs.