Natural justice in GST adjudication requires disclosure of demand basis and consideration of the taxpayer's reply before final order.

An adjudication under section 73 of the Jharkhand GST Act cannot be sustained where the authority fails to consider the taxpayer's reply to ASMT-10 and does not disclose the basis of the proposed demand. The taxpayer had specifically disputed the comparison of GSTR-3B data with e-way bill data, but the order merely stated that the reply was unsatisfactory without dealing with that objection. The HC held that natural justice required disclosure of the breakup of the alleged difference, a personal hearing, and a reasoned decision after considering the reply. The impugned determination was set aside and remitted for fresh consideration.

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Issues: Whether an order passed under section 73 of the Jharkhand Goods and Services Tax Act, 2017 could be sustained when the reply to ASMT-10 was not dealt with and the basis of the demand was not furnished before finalisation.

Analysis: The purpose of issuing ASMT-10 is to invite a reply and to consider the explanation offered by the taxpayer. The reply had specifically questioned the comparison of GSTR-3B data with e-way bill data and had raised a factual objection to the basis on which the difference was computed. The impugned order, however, did not refer to that contention at all and merely recorded that the reply was not satisfactory. Such non-consideration of the reply and absence of disclosure of the basis for the demand rendered the order unsustainable. The proper course was to supply the breakup of the alleged difference, afford a personal hearing, and then pass a reasoned order after considering the reply.

Conclusion: The order was set aside and the matter was remitted for fresh consideration after furnishing the basis of the demand, receiving a reply, and granting a personal hearing.

Final Conclusion: The impugned determination could not stand because the taxpayer's explanation was not considered and the demand basis was not transparently disclosed before adjudication.

Ratio Decidendi: An adjudication under section 73 cannot be sustained unless the authority considers the taxpayer's reply, discloses the basis of the proposed demand, and passes a reasoned order consistent with natural justice.

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