2024 (4) TMI 364 - HC - GST

Validity of order in original - rejecting the rectification petition - discrepancies between the GSTR 3B return and the auto-populated GSTR 2A return - imposition of cess - receipt of scrips - No opportunity to show cause/ personal hearing - HELD THAT - Out of the total tax liability, it appears that almost Rs. 5.17 crores pertains to the discrepancies between the GSTR 3B and GSTR 2A returns. Even from the intimation issued on 31.05.2023, it is evident that the amount reflected in the GSTR 2A auto-populated return is in excess of the ITC availed of and reflected in the petitioner's GSTR 3B returns. In those circumstances, imposition of GST on the excess amount reflected in the GSTR 2A return appears prima facie untenable. As regards the issue relating to cess, the petitioner has stated clearly that cess was paid in May 2018 by enclosing the relevant GSTR 3B return. In spite of that, the impugned order imposed liability with regard to cess. As regards the liability imposed with regard to scrips, the show cause notice called upon the petitioner to show cause as to why ITC should not be reversed in relation to the duty credit scrips. By contrast, in the impugned order, the said amount has been treated as a turnover from scrips. Since the petitioner was not provided an opportunity to show cause with regard to treating the value of scrips as turnover, the findings in relation thereto also cannot be sustained. Thus, the impugned order dated 3012.2023 is unsustainable. As a consequence, such order is set aside in relation to the issues forming the subject of the writ petition and the matter is remanded to the respondent for reconsideration. Since the petitioner was not provided an opportunity to show cause with regard to the scrips, the petitioner is permitted to file a reply in relation thereto within two weeks from the date of receipt of a copy of this order. Upon receipt thereof, the respondent is directed to provide a reasonable opportunity, including a personal hearing, and thereafter issue a fresh order within two months from the date of receipt of the petitioner's reply. These Writ Petitions are disposed of on the above terms. There shall be no order as to costs. Consequently, connected miscellaneous petitions are also closed.

Summary

Issues involved: Challenge to order in original dated 30.12.2023 for assessment period 2017-18 in W.P. No.8559 of 2024 and challenge to order rejecting the rectification petition in W.P.No.8607 of 2024.

Impugned Order in Original (Issue 1): The first issue pertains to discrepancies between the GSTR 3B return and the auto-populated GSTR 2A return. The tax demand on the excess amount reflected in the GSTR 2A was confirmed, despite the petitioner's explanation in the reply to the show cause notice.

Impugned Order in Original (Issue 2): The second issue concerns the imposition of cess. The petitioner claimed that cess was paid in May 2018 along with applicable interest, supported by the relevant GSTR 3B return. However, the impugned order still imposed liability regarding the cess.

Impugned Order in Original (Issue 3): The third issue relates to the receipt of scrips by the petitioner. The petitioner clarified in response to the show cause notice that no Input Tax Credit (ITC) was availed of in relation to the scrips. Despite this, liability was imposed by treating it as taxable turnover.

Impugned Order in Original (Issue 4): The last issue concerns obligations undertaken by the petitioner for corporate social responsibility. Tax was imposed in relation to this activity, which involved drilling a bore well for a school.

Court's Decision: The Court found the impugned order dated 30.12.2023 unsustainable due to various discrepancies and lack of opportunity provided to the petitioner to address certain issues. The order was set aside in relation to the issues raised in the writ petition, and the matter was remanded to the respondent for reconsideration. The petitioner was granted two weeks to file a reply regarding the scrips issue, and the respondent was directed to provide a reasonable opportunity, including a personal hearing, and issue a fresh order within two months from the date of receiving the petitioner's reply. The Writ Petitions were disposed of with no order as to costs.