2024 (7) TMI 260 - HC - GST

Challenge to assessment order - documents placed on record by the petitioner were not duly taken into consideration - violation of principles of natural justice - HELD THAT - The petitioner has placed on record the relevant GSTR 3B, GSTR 1 and GSTR 9C returns. On examining the same cumulatively, it appears prima facie that there could have been an inadvertent error. Neither the draft proposal nor the show cause notice referred to the requirement for the sales list and outward supply invoices. In these circumstances, the interest of justice warrants that another opportunity be provided to the petitioner on this issue. As regards the issue relating to RCM, the petitioner stated that the excess RCM availed of was reversed in August 2018. This aspect is required to be examined by the assessing officer. The impugned order dated 27.04.2024 is set aside on condition that the petitioner remits 10% of the disputed tax demand as regards the RCM issue. Such remittance shall be made within fifteen days from the date of receipt of a copy of this order - petition disposed off.

Issues:
1. Consideration of documents in tax proposal
2. Error in reporting turnover
3. Reversal of excess RCM
4. Non-production of sales list and invoices
5. Remittance of disputed tax demand
6. Opportunity for submitting additional documents

Analysis:

1. The judgment primarily deals with the challenge to an order dated 27.04.2024 on the grounds that the petitioner's documents were not duly considered. The petitioner received a draft proposal on 21.12.2023 following an audit, to which they replied on 28.12.2023. Subsequently, a show cause notice was issued on 29.12.2023, and the impugned order was passed after the petitioner's response on 29.03.2024.

2. The first issue raised by the petitioner concerned an error in reporting turnover in the GSTR 3B return for July 2018-19. The reported amount was mistakenly entered as Rs. 107,59,17,561 instead of Rs. 1,07,59,175. Although the error was rectified in subsequent filings, the tax proposal was confirmed due to alleged non-submission of certain documents, which the petitioner claims were not requested.

3. The second issue revolved around the reversal of excess RCM amounting to Rs. 2,17,148, which the petitioner corrected in the GSTR 3B return for August 2018. This correction was communicated in responses to notices, but the respondent confirmed tax proposals citing non-production of specific documents.

4. The respondent, represented by Mr. C. Harsha Raj, contended that the petitioner's replies were duly considered, and tax proposals were upheld due to the absence of documents like sales lists and invoices. However, the court observed that neither the draft proposal nor the show cause notice mentioned the requirement for these documents.

5. After examining the GSTR returns submitted by the petitioner, the court noted a potential inadvertent error and directed that another opportunity be given to the petitioner to address the issues. The court also instructed the petitioner to remit 10% of the disputed tax demand related to the RCM issue within fifteen days, emphasizing the need to protect revenue interests.

6. Consequently, the impugned order was set aside on the condition of the petitioner's remittance, allowing for the submission of additional documents within the specified timeline. Upon verification of the remittance and receipt of the additional documents, the respondent was directed to provide a fair opportunity to the petitioner, followed by a fresh order within three months.

Overall, the judgment in W.P.No.16036 of 2024 was disposed of with the specified conditions, without imposing any costs, leading to the closure of related W.M.P.Nos.17533 and 17534 of 2024.

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