2019 (10) TMI 1323 - Commissioner - GST

Suppression of facts or not - Whether the appellant contention that they have discharged the actual net tax liability for the month of October 2017 hence the suppression of tax arrived through mismatch report is not factual and correct has been substantiated with logical explanation and dependable evidence or not? HELD THAT - As per the computation of actual accounts the gross tax liability for the month of October 2017 was admitted by the appellant for 38, 647/- the same as determined by the A.A. However the appellant explained that after adjusting eligible ITC of 25, 080/- they have paid the remaining tax liability of 13, 568/- on 28-12-2017. This fact could not be verified by the assessing authority because the AA has not correctly scrutinized the appellant contentions and one sidedly construed the under declared tax even though the appellant has established that they have duly discharged the net tax payable for the month of October 2017. The facts evidence adduced by the appellant with reference to balance liable tax obviously suggest that the determination of under declaration by AA is lacking certainty and authenticity. On the other hand the appellant has strongly proffered and corroborated that after adjusting the eligible ITC they have duly paid the net tax liability for the month of October 2017. It is pertinent here to observe that mismatch reports is indicative in nature but cannot be seen as final to conceive any suppression of turnover/tax. The AA ought to have examined the appellant contentions submitted in response to the show cause notice which the AA failed to do so. The tax levied basing on mismatch reports is annulled the appellant contentions are found sustainable with reference to rational arguments and corroborative evidence - In the end the assessment is annulled on the levy made by the assessing authority - Appeal allowed - decided in favor of appellant.

Summary

Issues:
- Dispute over tax orders passed by the Assistant Commissioner (ST)
- Alleged under-declared tax liability of ?38,648
- Appeal filed by M/s. Sri Kali Krishna Industries

Analysis:
The appeal was filed against tax orders passed by the Assistant Commissioner (ST) concerning an alleged under-declared tax liability of ?38,648 by M/s. Sri Kali Krishna Industries. The assessing authority noted a discrepancy between the turnover declared in GSTR-1 and GSTR-3B for the period from July 2017 to June 2018. The appellant claimed that due to GSTN network software issues, their GSTR-3B return for October 2017 was automatically shown as 'NIL'. They transitioned to the composition scheme post-October 2017 and paid the actual tax liability for that month. The appellant argued that they had discharged the net tax liability before any show cause notice was issued.

During the appeal hearings, the Authorized Representative reiterated the contentions set forth in the grounds of appeal. The appellant maintained that they had paid the net tax liability for October 2017 after adjusting eligible ITC. However, the assessing authority unilaterally determined an under-declared tax based on the mismatch between GSTR-1 and GSTR-3B turnovers without considering the appellant's submissions. The appellant requested the annulment of the assessment order based on their compliance with tax payments for October 2017.

Issues for Adjudication:
- Verification of whether the appellant's claim of discharging the actual net tax liability for October 2017, thereby disputing the under-declared tax due to mismatch reports, is substantiated with logical explanation and reliable evidence.

Analysis:
Upon review of the grounds of appeal and the assessment order, it was found that the appellant acknowledged a gross tax liability of ?38,647 for October 2017, which was in line with the assessing authority's determination. The appellant asserted that after adjusting eligible ITC, they paid the remaining tax liability of ?13,568 on 28-12-2017. The assessing authority failed to verify this information and unilaterally concluded an under-declared tax, disregarding the appellant's compliance with the net tax payable for October 2017.

Conclusion:
The evidence presented by the appellant regarding the balance tax liability indicated that the assessing authority's determination of under-declaration lacked certainty and authenticity. The appellant's assertion of having paid the net tax liability for October 2017 after adjusting eligible ITC was supported by rational arguments and corroborative evidence. Mismatch reports, while indicative, cannot be solely relied upon to establish tax suppression. Therefore, the tax levied based on mismatch reports was annulled, and the appellant's contentions were deemed sustainable. Consequently, the appeal was allowed, and the tax imposed by the assessing authority was annulled.