GST Order not valid if consultant engaged by Taxpayer did not informed the Taxpayer about notice : High Court

1. The petitioner assails an assessment order dated 10-8-2023 imposing tax liability of Rs. 1,18,996/-, interest of Rs. 1,13,786/- and penalty of Rs. 20,000/- for the financial year 2017-18.

2. The petitioner asserts that he is engaged in the business of manufacturing and supplying bags He had engaged the services of a GST practitioner, Mr.V.Sahaya Pusparaj. Since the petitioner relied entirely on the said consultant, it is stated that the petitioner was not aware of the notice in Form ASMT-10 or the show cause notice in Form DRC-01. Therefore, the petitioner also did not participate in proceedings culminating in the assessment order. In order to substantiate the contention that the consultant had not kept the petitioner informed about these developments, an affidavit affirmed by the consultant on 22-12-2023 was placed on record. At paragraph 5 of the said affidavit, the consultant has stated that the notices were not available on the window/screen for communication relating to regular returns and that the notices were in the window relating to additional notices.

3. For the above reasons, learned counsel for the petitioner submits that the petitioner be given an opportunity to contest the claim especially considering that the claim is confined to a difference in turnover as between Form GSTR-1 and GSTR-3B.

4. Mr. Prasanth Kiran, learned Government Advocate, accepts notice on behalf of the respondent. He submits that all the notices were put up on the portal of the GST Department and that the non communication thereof by the consultant to the petitioner does not justify interference with the order. He also submits that a statutory appeal was available to the petitioner and that the petitioner failed to avail of such statutory remedy.

5. The order impugned records as under with regard to the intimation and show cause notice issued to the petitioner:

“Accordingly an Intimation in Form GST ASMT10 was issued to the Tax payer on 3-5-2023 and GST DRC 01 was issued to the Tax payer on 5-7-2023. But the tax payer has not responded to the show cause notice.”

6. As regards the hearing relating to the assessment, it is recorded as under:

“The sufficient opportunities given to the tax payer they are not attended the personal hearing and valid documents not submitted for their claim.”

7. From the above extracts, it is abundantly clear that the petitioner did not respond either to the intimation in Form GST- ASTM-10 or to the show cause notice in Form GST-DRC-01. In addition, the petitioner did not attend the personal hearing. The explanation of the petitioner is that the consultant did not keep the petitioner informed. The consultant, in turn, states that the notices were not available on the tab relating to regular returns and were instead accessible only through the tab relating to additional notices.

8. While these explanations are not wholly convincing, the fact remains that a registered person carrying on a small business did not have the opportunity to respond to the claim made by the tax department with regard to the discrepancy between the returns in Form GSTR-1 and Form GSTR-3B. Solely for the purpose of providing an opportunity to the petitioner, the impugned order calls for interference.

9. For reasons set out above, the impugned order is quashed and the matter is remanded for re-consideration. It is made clear that the petitioner will not have an opportunity to respond to the show cause notice and the opportunity would be limited to participation in the proceedings before the assessing officer and making any submissions in relation thereto. Any such submission shall be made by the petitioner within a maximum period of two weeks from the date of receipt of a copy of this order. The assessing officer is directed to complete the re-assessment within a maximum period of two months from the date of receipt of a copy of this order by issuing a reasoned decision