2024 (8) TMI 73 - HC - GST

Violation of principles of natural justice - reasonable opportunity was not provided to the petitioner to contest the tax demand on merits - entitlement to transitional Input Tax Credit - HELD THAT - On examining the petitioner s reply it appears that the petitioner enclosed TRAN-1. However while asserting that the petitioner has relevant VAT and CST invoices no other documents were enclosed. To that extent the petitioner cannot be absolved of responsibility for the confirmation of the tax proposal. However both in the above mentioned reply and in the affidavit the petitioner asserts that all relevant documents are available and were filed when TRAN-1 was originally filed. These facts and circumstances justify the provision of another opportunity to the petitioner albeit by putting the petitioner on terms. The impugned order dated 29.12.2023 is set aside subject to the condition that the petitioner remits 15% of the disputed tax demand as agreed to within fifteen days from the date of receipt of a copy of this order. Within the said period the petitioner is permitted to submit an additional reply by enclosing all relevant documents - petition disposed off.

Summary

Issues: Challenge to tax demand on grounds of lack of opportunity, entitlement to transitional Input Tax Credit, compliance with principles of natural justice, provision of another opportunity to contest tax demand.

In this judgment, the petitioner challenged an order dated 29.12.2023, claiming that they were not provided with a reasonable opportunity to contest the tax demand on merits. The petitioner contended that they were entitled to transitional Input Tax Credit and had filed all VAT and CST invoices with the TRAN-1 form. The respondent issued a show cause notice on 29.09.2023, to which the petitioner replied on 05.10.2023, enclosing a copy of TRAN-1. The impugned order was issued based on these facts. The petitioner argued that their reply was disregarded, and they sought another opportunity to contest the tax demand, agreeing to remit 15% of the disputed tax demand as a condition for remand.

The learned Government Advocate for the respondent contended that principles of natural justice were followed, as show cause notice and a reminder notice were issued. The tax proposal was confirmed due to the petitioner's failure to comply with the requirements of Section 140 of applicable GST enactments by not providing necessary documents. Upon examining the petitioner's reply, it was noted that although TRAN-1 was enclosed, no other documents were provided. However, the petitioner maintained that all relevant documents were filed initially. Considering these circumstances, the court found justification in providing another opportunity to the petitioner, subject to certain conditions.

The court set aside the impugned order dated 29.12.2023, with the condition that the petitioner remits 15% of the disputed tax demand within fifteen days and submits an additional reply enclosing all relevant documents. Once the requirements are met, the respondent is directed to provide a reasonable opportunity to the petitioner, including a personal hearing, and issue a fresh order within three months. The case was disposed of with no costs, and related motions were closed as well.