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2025 (5) TMI 1725 - HC - GSTDemand of tax interest and penalty - credit note values and its ITC reversal were not reflected in GSTR-9 annual return - HELD THAT - In the case on hand initially the ASMT notice and the show cause notice were issued by the respondent on 11.05.2023 and 27.06.2023 for which the detailed replies were filed by the petitioner on 10.08.2023 25.07.2023 respectively. Subsequently the impugned assessment order came to be passed by the respondent on 29.04.2024 after affording the opportunity of personal hearing to the petitioner. When such being the case it is clear that the respondent has provided sufficient opportunities to the petitioner prior to the passing of impugned order and hence no question would arise with regard to the violation of principle of natural justice. Further it was submitted that the petitioner is now willing to pay 25% of the disputed tax amount to the respondent. Therefore though this petition has been filed challenging the impugned order dated 19.08.2024 considering the submissions made by the petitioner this Court is inclined to dismiss the present petition by granting liberty to the petitioner to file an appeal against the impugned assessment order. Accordingly this writ petition is dismissed. No costs. Consequently the connected miscellaneous petitions are also closed. In such case the Appellate Authority shall consider the said appeal filed by the petitioner on its own merits and in accordance with law by providing sufficient opportunity to the petitioner without pressing for limitation.
1. ISSUES PRESENTED and CONSIDERED
The core legal questions considered by the Court in this writ petition include:
2. ISSUE-WISE DETAILED ANALYSIS Issue 1: Sustainability of the Impugned Assessment Order Relevant legal framework and precedents: The impugned order relates to assessment proceedings under the relevant tax statutes, where the respondent authority confirmed tax demand based on the petitioner's failure to reflect credit note values and corresponding Input Tax Credit (ITC) reversal in the GSTR-9 annual return. The legal framework mandates that proper disclosure in statutory returns is essential for accurate tax liability determination. Court's interpretation and reasoning: The Court observed that the respondent issued the ASMT notice and show cause notice on 11.05.2023 and 27.06.2023 respectively, to which the petitioner submitted detailed replies. The impugned order was passed only after affording the petitioner an opportunity for personal hearing. The Court found no procedural irregularity or violation of natural justice principles. Key evidence and findings: The petitioner's failure to reflect credit note values and ITC reversal in the annual return was the primary basis for the tax demand. The respondent's process involved issuance of notices, receipt of replies, and personal hearing, indicating adherence to procedural fairness. Application of law to facts: Given that the petitioner was provided adequate opportunity to present its case and the assessment order was passed in accordance with statutory provisions, the Court did not find the impugned order unsustainable on grounds of procedural impropriety or illegality. Treatment of competing arguments: While the petitioner contended that the demand was wrong and unsustainable, the Court emphasized the procedural compliance by the respondent and the absence of any violation of natural justice. Conclusion: The impugned assessment order was validly passed and not liable to be set aside on the grounds raised in the writ petition. Issue 2: Alleged Violation of Principles of Natural Justice Relevant legal framework and precedents: The principles of natural justice require that a party affected by an adverse order must be given adequate notice and opportunity to be heard before passing such order. Court's interpretation and reasoning: The Court noted that the petitioner was served with the ASMT and show cause notices and filed detailed replies. Further, the petitioner was afforded a personal hearing before the impugned order was passed. Key evidence and findings: The record showed issuance of notices on 11.05.2023 and 27.06.2023, replies filed on 10.08.2023 and 25.07.2023, and personal hearing conducted prior to the assessment order dated 29.04.2024. Application of law to facts: The procedural steps undertaken by the respondent complied with the requirements of natural justice. Treatment of competing arguments: The petitioner's contention of violation of natural justice was rejected due to the clear evidence of procedural fairness. Conclusion: No violation of the principles of natural justice was found in the passing of the impugned order. Issue 3: Filing of Appeal Beyond Statutory Time Limit and Condonation of Delay Relevant legal framework and precedents: Tax statutes typically prescribe a strict time limit for filing appeals against assessment orders. Courts have discretion to condone delays for sufficient cause and grant liberty to file appeals beyond the prescribed period, often subject to conditions such as pre-deposit of disputed amounts. Court's interpretation and reasoning: The petitioner admitted that the statutory time limit for filing an appeal had expired but sought condonation of delay and liberty to file the appeal. The petitioner offered to pay 25% of the disputed tax amount, comprising 10% as statutory pre-deposit and an additional 15% as a condition for condonation of delay. Key evidence and findings: The petitioner's willingness to pay a substantial portion of the disputed tax amount was a significant factor. The respondent's counsel acceded to the petitioner's request and did not oppose the condonation. Application of law to facts: In the interest of justice and considering the petitioner's offer and respondent's acquiescence, the Court exercised its discretion to condone the delay and grant liberty to file the appeal within 30 days from the date of receipt of the order. Treatment of competing arguments: The Court balanced the petitioner's delay against the respondent's consent and the petitioner's undertaking to pay a pre-deposit, thereby ensuring that the appeal process would not be misused. Conclusion: Delay in filing the appeal was condoned, and liberty was granted to the petitioner to file the appeal on payment of 25% of the disputed tax amount. 3. SIGNIFICANT HOLDINGS The Court held that:
Core principles established include:
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