2026 (2) TMI 1259 - HC - GST

Conditional remand with pre-deposit required; taxpayer given final chance to substantiate bank reconciliation before fresh assessment.

Assessment orders raising demand based on discrepancies between GSTR-3B and bank credits were remitted for fresh adjudication subject to conditions. The ... Sufficiency of statutory reply to Show Cause Notice - reconciliation of bank statements with GSTR-3B and annual returns - remand for fresh adjudication on merits subject to pre-deposit - conditional vacation of bank attachment upon pre-deposit - abeyance of recovery proceedings during compliance period - HELD THAT:- The replies filed by the petitioner to the respective notices issued in Form GST DRC-01 under Section 74 are skeletal in nature and do not adequately meet the allegations made against the petitioner in the respective Show Cause Notices. In particular, with respect to Defect No.8, the mere production of excessive documents is not sufficient to establish that there was no excess credit of the amount. It is incumbent upon the petitioner to tabulate the entries under different categories and reconcile the amounts reflected in the bank statements with the monthly returns filed in Form GSTR-3B and the annual return filed in Form GSTR- 9/9C. Since the replies submitted by the petitioner lack clarity, I am of the view that the petitioner may be granted one more opportunity to explain the case afresh. Following the consistent view taken by this Court under similar circumstances, the cases are remitted back to the 1st respondent to pass a fresh order on merits, subject to the Petitioner depositing a sum of Rs. 35,00,000/- (Rupees thirty five lakhs) of the disputed tax confirmed in vide impugned Assessment orders, in cash from the Petitioner's Electronic Cash Register within a period of 30 days from the date of receipt of a copy of this order. Within such time, the Petitioner shall also file a proper reply to the respective Show Cause Notices in Form GST DRC-01 all dated 13.05.2025 together with requisite documents to substantiate the case by treating the respective impugned Assessment Orders dated 22.07.2025 as an addendum to the respective Show Cause Notices dated 13.05.2025. It is made clear that bank attachment shall be lifted subject to the Petitioner depositing a sum of Rs. 35,00,000/-(Rupees thirty five lakhs) of the disputed tax as ordered above and the Petitioner not being in arrears of any other amount for any other tax period barring the amount demanded under the impugned Order. In case the Petitioner fails to comply with any of the stipulations, the 1st Respondent is at liberty to proceed against the Petitioner to recover the tax in accordance with law as if these Writ Petitions were dismissed in limine today. Writ Petitions stand disposed of. Issues: Whether the impugned assessment orders dated 22.07.2025 under Section 74 of the respective GST enactments are sustainable on merits or whether the matters should be remitted for fresh consideration subject to deposit and related conditions.Analysis: The petitions challenge assessment orders raising demand mainly based on differences between amounts in Form GSTR-3B and amounts credited to the petitioner's bank account. The petitioner filed skeletal replies and later furnished bank statements by email which, according to the petitioner, were not examined before passing the impugned orders. The Court finds that the replies lack necessary tabulation and reconciliation of bank entries with monthly and annual returns and that further opportunity to submit a clear, substantiated reply is appropriate. Consistent with the Court's established approach in similar cases, a conditional remand with an order for pre-deposit and suspension of recovery measures pending fresh adjudication is an appropriate remedy where the petitioner is given a final chance to substantiate its defence.Conclusion: The impugned assessment orders are remitted to the first respondent for fresh consideration on merits. This remand is subject to the petitioner depositing Rs. 35,00,000 from its electronic cash register within 30 days and filing a proper, substantiated reply; on compliance, the first respondent shall decide the matters afresh and the bank attachment shall be vacated. The petitioners obtain interim relief conditional on compliance.