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of <h1>Assessment order set aside due to GSTR 2A and 3B discrepancies; fresh adjudication ordered under GST rules</h1> The HC set aside the impugned assessment order dated 15.02.2025 due to discrepancies between GSTR 2A and GSTR 3B data and the petitioner's failure to ... Discrepancy between the data in GSTR 2A and GSTR 3B - petitioner neither replied to the SCN nor participated in the proceedings pursuant to the personal hearing notices that were issued to the petitioner - import of Seashell for Handicraft purpose and IGST paid - data is captured in GSTR 3B but not in GSTR 2A - HELD THAT:- Prima facie, the petitioner appears to have made out a case for interference. That apart, it is noticed that part of the amount has already been recovered pursuant to the impugned order and that the petitioner deserves to fresh opportunity. Consequently, the impugned assessment order passed by the respondent, dated 15.02.2025 bearing Ref.No.GSTIN:33CPTPM3703G1ZU/2020-21 is set aside and the case is remitted back to the respondent to pass a fresh order on merits and in accordance with law. The petitioner shall file a reply to the show cause notice issued earlier, within a period of 30 days from the date of receipt of a copy of this order. Petition disposed off. 1. ISSUES PRESENTED and CONSIDERED Whether the impugned assessment order passed without affording an opportunity of personal hearing to the petitioner is valid. Whether non-intimation of the show cause notice to the petitioner affects the validity of the assessment order. Whether the discrepancy between GSTR 2A and GSTR 3B data, particularly in the context of import transactions, justifies interference with the impugned order. Whether the petitioner is entitled to a fresh opportunity to file a reply and be heard before passing a fresh assessment order. Whether the impugned order should be set aside and the matter remitted for fresh adjudication in accordance with law and relevant precedents. Whether the attachment of the petitioner's bank account should be lifted pending fresh assessment proceedings. 2. ISSUE-WISE DETAILED ANALYSIS Issue 1: Validity of the impugned assessment order passed without personal hearing - Legal Framework and Precedents: The principles of natural justice require that before passing an adverse order, the affected party must be given an opportunity of personal hearing. The Court referred to a precedent wherein it was held that assessment orders passed without hearing the petitioner are liable to be quashed and remanded. - Court's Interpretation and Reasoning: The impugned order was passed without affording the petitioner a personal hearing, despite notices being issued. This procedural lapse violates the principles of natural justice. - Key Evidence and Findings: The petitioner did not participate in the proceedings or reply to the show cause notice, but the absence of personal hearing opportunity was noted. - Application of Law to Facts: Since the petitioner was not heard before passing the order, the assessment order is procedurally flawed. - Treatment of Competing Arguments: The respondent argued that notices were issued, but the petitioner did not respond. The Court emphasized that issuing notices alone is insufficient if the petitioner is not effectively heard. - Conclusion: The impugned order is set aside on grounds of denial of personal hearing and remitted for fresh consideration. Issue 2: Non-intimation of the show cause notice to the petitioner - Legal Framework and Precedents: Proper service and intimation of show cause notices are essential for fair adjudication. Failure to inform the petitioner undermines the validity of subsequent orders. - Court's Interpretation and Reasoning: Although the show cause notice dated 22.11.2024 was referred to in the impugned order, it was not intimated to the petitioner. This procedural irregularity vitiates the assessment process. - Key Evidence and Findings: The petitioner's counsel stated non-receipt of the show cause notice. - Application of Law to Facts: The absence of intimation deprived the petitioner of the opportunity to respond timely. - Treatment of Competing Arguments: The respondent did not dispute the non-intimation but relied on the issuance of personal hearing notices. - Conclusion: The Court found merit in the petitioner's contention and ordered a fresh opportunity to file a reply to the show cause notice. Issue 3: Discrepancy between GSTR 2A and GSTR 3B data in the context of import transactions - Legal Framework and Precedents: Input Tax Credit (ITC) reconciliation between GSTR 2A and GSTR 3B is a common ground for assessment disputes. However, for importers, GSTR 2A may not capture data as there is no independent supplier, impacting ITC claims. - Court's Interpretation and Reasoning: The petitioner, being an importer of seashells for handicraft purposes, had paid IGST which was reflected in GSTR 3B but not in GSTR 2A, due to the nature of import transactions. - Key Evidence and Findings: The petitioner's explanation about the nature of import and IGST payment was accepted prima facie. - Application of Law to Facts: The Court recognized that automatic reconciliation based on GSTR 2A is not applicable to imports, warranting careful examination. - Treatment of Competing Arguments: The respondent relied on discrepancy as a basis for assessment; the Court found this insufficient without proper hearing and consideration of import-specific facts. - Conclusion: The discrepancy alone does not justify the impugned order; fresh assessment must consider the import context. Issue 4: Entitlement to fresh opportunity to file reply and be heard - Legal Framework and Precedents: Principles of natural justice and statutory provisions mandate that a taxpayer must be given a reasonable opportunity to respond to show cause notices before adverse orders. - Court's Interpretation and Reasoning: The petitioner had not replied to the show cause notice and was not heard. The Court emphasized the necessity of affording a fresh opportunity to file reply and be heard. - Key Evidence and Findings: The petitioner's failure to respond was due to non-intimation and lack of personal hearing opportunity. - Application of Law to Facts: The Court ordered the petitioner to file a reply within 30 days of receipt of the order copy and directed the respondent to consider it before passing fresh orders. - Treatment of Competing Arguments: The respondent's position that the petitioner did not respond was noted, but the Court stressed that procedural fairness requires fresh hearing. - Conclusion: The petitioner is entitled to a fresh opportunity to file reply and be heard before fresh assessment. Issue 5: Setting aside the impugned order and remitting the matter for fresh adjudication - Legal Framework and Precedents: Quashing and remanding orders is appropriate where procedural irregularities and errors of law are apparent. - Court's Interpretation and Reasoning: The Court found the impugned order flawed on grounds of denial of hearing and non-intimation of show cause notice, warranting setting aside. - Key Evidence and Findings: Partial recovery under the impugned order had already occurred, but that did not preclude remand. - Application of Law to Facts: The matter was remitted for fresh adjudication on merits and in accordance with law, with directions for expeditious disposal. - Treatment of Competing Arguments: The Court balanced the need for procedural fairness with administrative efficiency by imposing timelines. - Conclusion: The impugned order is set aside and the case remitted for fresh assessment after due process. Issue 6: Lifting of attachment of petitioner's bank account pending fresh proceedings - Legal Framework and Precedents: Attachment of bank accounts is a serious measure and may be lifted if the underlying order is set aside and fresh proceedings are ordered. - Court's Interpretation and Reasoning: Referring to a precedent, the Court directed lifting of the attachment of the petitioner's bank account, recognizing the petitioner's liberty to approach the respondent for fresh orders. - Key Evidence and Findings: The petitioner's bank account was attached pursuant to the impugned order. - Application of Law to Facts: Since the impugned order was quashed, the attachment was ordered to be lifted to prevent undue hardship. - Treatment of Competing Arguments: The Court did not record specific objections from the respondent on this point but acted in the interest of justice. - Conclusion: The attachment of the petitioner's bank account shall be lifted pending fresh assessment proceedings.
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