Order set aside for AY 2018-19; petitioner to deposit 25% disputed tax within four weeks under GST rules

The HC set aside the impugned order dated 12-4-2024 concerning the assessment year 2018-19, involving a discrepancy between GSTR-3B and GSTR-2A. The petitioner was directed to deposit 25% of the disputed tax within four weeks from receipt of the order. The petition was disposed of accordingly.

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ISSUES:

Whether service of show cause notices and assessment orders by uploading on the GST Portal without tender or sending by RPAD constitutes valid service under the Goods and Services Tax Act, 2017.Whether non-participation in adjudication proceedings due to lack of knowledge of initiated proceedings affects the validity of the assessment order.Whether a remand with conditions, including payment of a portion of disputed taxes, is appropriate in cases where procedural lapses in service occur.The scope and procedure for providing an opportunity of hearing after setting aside an impugned assessment order.

RULINGS / HOLDINGS:

The Court held that service of show cause notices and assessment orders solely by uploading on the GST Portal, without tender or sending by RPAD, does not constitute valid service, resulting in the petitioner being unaware of the proceedings and unable to participate.Due to the lack of valid service and consequent non-participation, the impugned order dated 12-4-2024 was set aside.The Court directed that the petitioner shall deposit 25% of the disputed taxes as a condition precedent to further adjudication, reflecting the principle applied in the precedent judgment cited.Upon compliance with the payment condition, the impugned order shall be treated as a show cause notice, and the petitioner shall be afforded a reasonable opportunity to file objections within four weeks, which the assessing authority must consider before passing fresh orders.Failure to comply with the payment or filing objections within the stipulated periods shall result in restoration of the impugned order.

RATIONALE:

The Court applied the statutory provisions under the Goods and Services Tax Act, 2017, specifically Section 61 relating to scrutiny of returns and procedural requirements for service of notices.The Court relied on its recent precedent emphasizing the necessity of valid service and the principle of audi alteram partem, ensuring the petitioner's right to be heard before passing an adverse order.The conditional remand and requirement of payment of 25% of disputed taxes reflect a doctrinal approach balancing procedural fairness with revenue protection.The Court's directions establish a procedural framework for verification of payments, adjustment of amounts already paid, and timelines for compliance and adjudication, ensuring clarity and finality in the reassessment process.

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