GST input tax credit and return mismatch allegations (GSTR-2A/3B, GSTR-9) reopened after no real chance to reply

The dominant issue was whether assessment orders alleging excess ITC, non-generation of 3-way invoices, mismatch between GSTR-2A and GSTR-3B, and under-declaration in GSTR-9 could stand without affording a meaningful opportunity to respond with supporting documents. The HC held that, since the assessee undertook to deposit the disputed amounts and the matters required reconsideration on merits after a proper reply to the DRC-01 notices, the impugned orders warranted interference. The assessment orders were quashed and the matters remitted for de novo adjudication, conditional on deposit within 30 days and filing replies with documents; upon compliance, any bank attachment was to be vacated and fresh orders passed after hearing.

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1. ISSUES PRESENTED AND CONSIDERED

(i) Whether the impugned assessment orders should be interfered with and set aside, and matters remitted for de novo consideration, where the petitioner admittedly failed to reply to the preceding show cause notices but expressed willingness to deposit specified amounts as a condition for fresh adjudication.

(ii) What conditions, timelines, and consequential directions (including treatment of the impugned orders vis-à-vis the show cause notices, the obligation to pass fresh orders after hearing, and the status of bank attachment) should govern such remand.

2. ISSUE-WISE DETAILED ANALYSIS

Issue (i): Quashing of assessment orders and remand for de novo proceedings on conditional deposit

Legal framework: The Court proceeded on its "consistent view taken under similar circumstances" and exercised its writ jurisdiction to set aside the impugned assessment orders and remit the matters for fresh consideration, based on the petitioner's admitted non-response to show cause notices and willingness to comply with monetary conditions.

Interpretation and reasoning: The Court recorded the petitioner's submission that replies were not filed to the show cause notices and that the petitioner was willing to deposit amounts as a condition for de novo proceedings. Accepting this submission and aligning with the consistent approach adopted in similar situations, the Court concluded that the appropriate course was to quash the assessment orders and remit the matters back for fresh adjudication, rather than sustaining the orders.

Conclusions: The impugned assessment orders were quashed and the matters remitted to the concerned authorities, subject to compliance with deposit conditions within 30 days from receipt of the order. The Court fixed the deposit quantum as 50% of the disputed tax for three matters relating to the 2019-20 tax period and 25% of the disputed tax for two matters relating to the 2020-21 tax period.

Issue (ii): Conditions and directions governing remand, replies, timelines for fresh orders, and bank attachment

Legal framework: The Court structured the remand through mandatory conditions: (a) time-bound deposit; (b) filing of replies with documents; (c) fresh adjudication on merits after hearing; (d) consequential relief regarding bank attachment; and (e) liberty to the respondent to proceed if conditions are breached.

Interpretation and reasoning: To ensure that remand did not result in indefinite delay and to balance interests, the Court imposed clear compliance steps. The petitioner was directed to file replies to the show cause notices in DRC-01 for the respective periods with supporting documents, and the impugned assessment order was to be treated as an addendum to the relevant show cause notices. Upon such compliance, the respondent was obligated to pass fresh orders on merits, in accordance with law, after hearing the petitioner, preferably within three months. The Court further linked the grant of interim consequential relief to compliance, directing that bank attachment, if any, would stand raised/vacated subject to deposit.

Conclusions: (a) Deposit to be made within 30 days; (b) replies to DRC-01 to be filed with documents, treating the impugned orders as an addendum to the show cause notices; (c) fresh orders to be passed on merits after hearing, preferably within three months from compliance; (d) subject to deposit, any bank attachment to stand raised/vacated; and (e) on failure to comply with any condition, the respondent may proceed in accordance with law as if the writ petitions had been dismissed in limine.

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