2025 (11) TMI 246 - HC - GST

Matter remitted to original authority for fresh adjudication on confirmed demands; petitioner to deposit 50% cash within 30 days

HC remitted the matter to the original authority for fresh adjudication on confirmed demands, subject to the petitioner depositing 50% of the disputed tax ... Confirmation of tax, interest and penalty - difference between GSTR-3B and GSTR-2A and E-way bill verification - petitioner failed to respond to the notice in DRC-01 - HELD THAT:- This writ petition is disposed by following the consistent view taken by this Court under similar circumstances by remitting the case back to the respondents/original authority to pass a fresh order in so far as the demands have been confirmed in the respective impugned orders dated 01-08-2024 and 29-08-2024, subject to petitioner depositing 50% of the disputed tax in cash within a period of thirty (30) days from the date of receipt of a copy of this order. The Petitioner shall file a reply contemporaneously to the Show Cause Notice in GST DRC-01 dated 22.05.2025 and 31.05.2024 together with requisite documents to substantiate the case by treating the impugned order dated 01.08.2024 and 29.08.2024 as an addendum to the Show Cause Notice dated 22.05.2025 and 31.05.2024 within a period of thirty (30) days from the date of receipt of a copy of this order. Petition disposed off. ISSUES PRESENTED AND CONSIDERED 1. Whether the impugned assessment orders for the tax period 2019-2020 confirming tax, interest and penalty on account of discrepancies between GSTR-3B and GSTR-2A and E-way bill verification are liable to be set aside or require fresh adjudication. 2. Whether the petitioner is entitled to relief in writ jurisdiction despite not having responded earlier to the GST DRC-01 notice and having discovered the impugned orders only upon initiation of recovery proceedings. 3. Whether the matter should be remitted to the original authority for fresh consideration and, if so, on what conditions (including interim conditions such as deposit of a portion of disputed tax and filing of a reply to the show cause notice). 4. The effect of binding precedents relied upon by respondents (Singh Enterprises; Hongo India; Glaxo Smith Kline) on the grant of relief and remittal in the present facts. ISSUE-WISE DETAILED ANALYSIS Issue 1 - Validity of impugned assessment orders confirming tax, interest and penalty Legal framework: The assessment orders under GST confirming tax, interest and penalty are subject to judicial review on legality, procedural fairness and correctness of the adjudicatory process; disputes identified include mismatch between GSTR-3B and GSTR-2A and E-way bill verification. Precedent Treatment: The respondents relied on Supreme Court authorities (Singh Enterprises; Hongo India; Glaxo Smith Kline) to contend that writ relief is limited and such taxation orders are to be interfered with sparingly. Interpretation and reasoning: The Court noted that part of the original demand was already dropped to avoid duplication but demands in respect of defect Nos.2 and 3 were confirmed. Rather than quashing the impugned orders outright, the Court considered whether the adjudicatory process should be revisited by the original authority to afford the petitioner an opportunity to be heard and for merits to be reconsidered. Ratio vs. Obiter: Ratio - where confirmed demands arise from alleged defects (GSTR-3B vs GSTR-2A and E-way verification), the appropriate course in circumstances where procedural opportunity was deficient is to remit for fresh adjudication; Obiter - general observations on the amounts shown in the assessment tables and duplication being avoided. Conclusion: The impugned orders are not upheld as final; the Court remits the matters in so far as demands have been confirmed for fresh decision on merits by the original authority after compliance with specified conditions (see Issue 3). Issue 2 - Entitlement to writ relief despite non-response to DRC-01 and delay in instituting challenge Legal framework: Relief in writ jurisdiction may be granted where fundamental procedural fairness is lacking or where statutory adjudicatory processes have not been afforded; petitioners must, however, show preparedness to engage in the statutory process when given opportunity. Precedent Treatment: Respondents relied on Supreme Court jurisprudence emphasising limited interference by writ courts in revenue matters; the Court acknowledged these authorities but proceeded in line with the High Court's consistent approach in similar circumstances. Interpretation and reasoning: The petitioner had failed initially to respond to DRC-01 but upon learning of the orders during recovery proceedings sought judicial intervention and offered to participate in the statutory process. The Court treated the impugned orders as addenda to the show cause notices and required the petitioner to file a reply contemporaneously, thus prioritising adjudication on merits over dismissal for initial non-response. Ratio vs. Obiter: Ratio - a petitioner who did not initially reply may yet be afforded an opportunity to respond and have the matter adjudicated afresh if the court remits the matter subject to conditions; Obiter - remarks on the petition filing date and discovery of orders during recovery proceedings. Conclusion: Writ relief in the form of remittal with conditions is appropriate despite earlier non-response; the petitioner must now actively participate by filing the reply and supporting documents within the stipulated period. Issue 3 - Remittal for fresh adjudication and conditions (deposit and filing of reply) Legal framework: Courts may remit matters to original authorities for fresh consideration where procedural fairness or completeness of adjudication is in doubt; such remittal can be conditioned on equitable interim measures (e.g., deposit of a portion of disputed tax) to balance public revenue interest and petitioner's right to adjudication. Precedent Treatment: Although respondents cited Supreme Court decisions limiting writ interference, the Court invoked its consistent High Court approach to remittal subject to deposit as a conditional interim measure. Interpretation and reasoning: To secure a fair and efficacious fresh adjudication, the Court directed (i) deposit of 50% of the disputed tax in cash within thirty days from receipt of the order and (ii) contemporaneous filing of a reply to GST DRC-01 show cause notices (treated with the impugned orders as addenda) within thirty days. The respondents were directed to proceed to pass a final order on merits and in accordance with law only after these conditions were complied with. Ratio vs. Obiter: Ratio - remittal conditioned on deposit of 50% of disputed tax and filing of reply within prescribed time is an appropriate mechanism to preserve revenue while enabling adjudication on merits; Obiter - procedural timelines and characterization of impugned orders as addenda to specified show cause notices are incidental observations tied to the directions given. Conclusion: The matter is remitted for fresh adjudication on merits provided the petitioner deposits 50% of the disputed tax within thirty days and files a substantive reply with documents within thirty days; failure to comply permits respondents to proceed as if the writ petition were dismissed. Issue 4 - Effect of binding precedents relied upon by respondents Legal framework: Binding precedents constraining writ relief in revenue matters must be considered, but the Court retains discretion to craft relief consistent with law and established High Court practice where procedural fairness dictates remittal rather than outright quashing. Precedent Treatment: The Court noted the respondents' reliance on Supreme Court decisions but followed its own consistent view in similar circumstances to remit the matter on conditions. The judgment therefore distinguishes the immediate facts from those precedents to the extent that those authorities were relied upon to oppose remittal. Interpretation and reasoning: The Court balanced the respondents' reliance on higher-court authority with the need for fresh consideration on merits and procedural completeness. It applied a conditional remittal framework previously adopted by the Court rather than allowing those precedents to preclude judicially directed fresh adjudication. Ratio vs. Obiter: Ratio - higher court precedents do not automatically preclude remittal with conditions where procedural or substantive fairness requires fresh consideration; Obiter - general commentary on the cited authorities as presented by respondents. Conclusion: The Court treated the cited Supreme Court authorities as relevant but not determinative of the relief granted; remittal on stated conditions was ordered notwithstanding those citations. Cross-references 1. Issues 1 and 2 are interrelated: confirmation of demands (Issue 1) was remitted because the petitioner was granted an opportunity to respond (Issue 2) and to enable fresh consideration (Issue 3). 2. Issue 4 informs the Court's remedial choice in Issue 3: although precedents were invoked to resist intervention, the Court adopted a conditional remittal consistent with its prior practice to reconcile revenue protection and adjudicatory fairness.