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www.taxpublishers.in Central Goods and Services Tax Act, 2017, Section 73 Determination of tax--*Reasonable opportunity of hearing not given to assessee--Validity of* *Conclusion:* Where assessment order was passed without giving reasonable opportunity of hearing to the assessee, the same was against the principles of natural justice. Revenue passed assessment order under section 73 of the Act due to mismatch between GSTR-3B and GSTR-1 returns and between GSTR-3B and GSTR-7 returns. The assessee submitted that it was unable to contest the tax demand on account of being unaware of proceedings. Further, such mismatch occurred entirely on account of an inadvertent error in categorizing the nature of transaction in the returns. *Held:* The documents on record clearly indicated that the assessee was negligent in not contesting the tax demand. However, it was equally clear that the impugned assessment order was issued without hearing the assessee and without considering its explanation and any documents in support thereof. Therefore, the assessee was to be provided an opportunity to contest the tax demand. Accordingly, the impugned assessment order was quashed subject to remittance of 10% of the disputed tax demand by the assessee. *Decision:* In favour of assessee IN THE MADRAS HIGH COURT SENTHILKUMAR RAMAMOORTHY Ambal & Co. v. Asstt. Commr. (ST) W.P. No. 5567 of 2024 and W.M.P. Nos. 6160 & 6162 of 2024 5 March, 2024 Petitioner by: S. Sathyanarayanan Respondent by: T.N.C. Kaushik, AGP (T) ORDER An assessment order dated 31-10-2023 is the subject of challenge. The petitioner asserts that he had engaged the services of a consultant to handle GST compliance. Upon being informed by the consultant recently that the impugned assessment order was issued, it is asserted that the petitioner was shocked since he was unaware about the intimation or the show cause notice preceding the assessment order. Later, he realized that the show cause notice was uploaded in the additional notices and orders tab of the GST portal. The present writ petition was filed in those circumstances. 2. Learned counsel for the petitioner submits that the petitioner was unable to contest the tax demand on account of being unaware of proceedings. On the merits, he submits that the tax demand pertains to an alleged mismatch between the GSTR-3B and GSTR-1 return and the alleged mismatch between the GSTR-3B and GSTR-7 returns. He further submits that such mismatch occurred entirely on account of an inadvertent error in categorizing the nature of transaction in the returns. 3. On instructions, he submits that the petitioner is ready to remit 10% of the disputed tax demand as a condition for remand. 4. Mr. T.N.C. Kaushik, learned Additional Government Pleader, accepts notice on behalf of the respondent. By referring to the impugned order, he points out that proceedings commenced with the issuance of notice in Form ASMT-10 in November 2021. He also points out that the intimation was issued in April 2022, the show cause notice in January 2023 and that a personal hearing was also offered to the petitioner. 5. The documents on record clearly indicate that the petitioner was negligent in not contesting the tax demand. However, it is equally clear that the impugned assessment order was issued without hearing the petitioner and, consequently, without considering the petitioner's explanation and any documents in support thereof. In these circumstances, albeit by putting the petitioner on terms, the petitioner should be provided an opportunity to contest the tax demand. 6. Therefore, the impugned assessment order is quashed subject to the condition that the petitioner remits 10% of the disputed tax demand as a condition for remand. The petitioner is also submitted to file a reply to the show cause notice within a maximum period of two weeks from the date of receipt of a copy of this order along with 10% of the disputed tax demand. Subject to receipt of the aforesaid, the assessing officer is directed to provide a reasonable opportunity, including a personal hearing, and issue a fresh assessment order in accordance with law within a maximum period of two months thereafter. 7. W.P.No.5567 of 2024 is disposed of on the above terms. No costs. Consequently, W.M.P.Nos.6160 and 6162 of 2024 are closed.

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Central Goods and Services Tax Act, 2017, Section 73

Determination of tax--Reasonable opportunity of hearing not given to assessee--Validity of

Conclusion: Where assessment order was passed without giving reasonable opportunity of hearing to the assessee, the same was against the principles of natural justice.

Revenue passed assessment order under section 73 of the Act due to mismatch between GSTR-3B and GSTR-1 returns and between GSTR-3B and GSTR-7 returns. The assessee submitted that it was unable to contest the tax demand on account of being unaware of proceedings. Further, such mismatch occurred entirely on account of an inadvertent error in categorizing the nature of transaction in the returns. Held: The documents on record clearly indicated that the assessee was negligent in not contesting the tax demand. However, it was equally clear that the impugned assessment order was issued without hearing the assessee and without considering its explanation and any documents in support thereof. Therefore, the assessee was to be provided an opportunity to contest the tax demand. Accordingly, the impugned assessment order was quashed subject to remittance of 10% of the disputed tax demand by the assessee.

Decision: In favour of assessee

IN THE MADRAS HIGH COURT

SENTHILKUMAR RAMAMOORTHY

Ambal & Co. v. Asstt. Commr. (ST)

W.P. No. 5567 of 2024 and W.M.P. Nos. 6160 & 6162 of 2024

5 March, 2024

Petitioner by: S. Sathyanarayanan

Respondent by: T.N.C. Kaushik, AGP (T)

ORDER

An assessment order dated 31-10-2023 is the subject of challenge. The petitioner asserts that he had engaged the services of a consultant to handle GST compliance. Upon being informed by the consultant recently that the impugned assessment order was issued, it is asserted that the petitioner was shocked since he was unaware about the intimation or the show cause notice preceding the assessment order. Later, he realized that the show cause notice was uploaded in the additional notices and orders tab of the GST portal. The present writ petition was filed in those circumstances.

2. Learned counsel for the petitioner submits that the petitioner was unable to contest the tax demand on account of being unaware of proceedings. On the merits, he submits that the tax demand pertains to an alleged mismatch between the GSTR-3B and GSTR-1 return and the alleged mismatch between the GSTR-3B and GSTR-7 returns. He further submits that such mismatch occurred entirely on account of an inadvertent error in categorizing the nature of transaction in the returns.

3. On instructions, he submits that the petitioner is ready to remit 10% of the disputed tax demand as a condition for remand.

4. Mr. T.N.C. Kaushik, learned Additional Government Pleader, accepts notice on behalf of the respondent. By referring to the impugned order, he points out that proceedings commenced with the issuance of notice in Form ASMT-10 in November 2021. He also points out that the intimation was issued in April 2022, the show cause notice in January 2023 and that a personal hearing was also offered to the petitioner.

5. The documents on record clearly indicate that the petitioner was negligent in not contesting the tax demand. However, it is equally clear that the impugned assessment order was issued without hearing the petitioner and, consequently, without considering the petitioner's explanation and any documents in support thereof. In these circumstances, albeit by putting the petitioner on terms, the petitioner should be provided an opportunity to contest the tax demand.

6. Therefore, the impugned assessment order is quashed subject to the condition that the petitioner remits 10% of the disputed tax demand as a condition for remand. The petitioner is also submitted to file a reply to the show cause notice within a maximum period of two weeks from the date of receipt of a copy of this order along with 10% of the disputed tax demand. Subject to receipt of the aforesaid, the assessing officer is directed to provide a reasonable opportunity, including a personal hearing, and issue a fresh assessment order in accordance with law within a maximum period of two months thereafter.

7. W.P.No.5567 of 2024 is disposed of on the above terms. No costs. Consequently, W.M.P.Nos.6160 and 6162 of 2024 are closed.