2024 (7) TMI 748 - HC - GST

Challenge to assessment order - mismatch between the taxable turnover reported in GSTR 9 and GSTR 3B - HELD THAT - As regards the mismatch between the taxable turnover reported in GSTR 9 and GSTR 3B, it was recorded that the differential turnover is Rs. 1,17,31,242/-. Instead of treating such differential turnover as taxable supply and computing tax thereon at the applicable rate, it appears that tax of Rs. 1,17,31,242/- has been apportioned between CGST and SGST. By considering the petitioner's reply to the show cause notice, defect no.2, defect no.4, defect no.6, defect no.7 and defect no.8 were dropped. As regards defect no.1, the petitioner has placed on record the annual return whereby the mismatch between GSTR 1 and GSTR 3B was reconciled by reflecting the value of credit notes. As regards defect no.5, the petitioner shall pay the interest, as agreed to, unless waiver is granted in the interregnum pursuant to the recommendations of the GST Council. As regards defect nos.9 and 10, the petitioner has agreed to remit 10% of the disputed tax demand as a condition for remand. The impugned order dated 29.12.2023 is partly set aside only in so far as defect no.1, defect no.3, defect no.9 and defect no.10 are concerned subject to the petitioner remitting 10% of the disputed tax demand as regards defect no.9 and defect no.10 within 15 days from the date of receipt of a copy of this order. Upon being satisfied that 10% of the disputed tax demand, as stated above, was received, the respondent is directed to provide a reasonable opportunity to the petitioner, including a personal hearing, and thereafter issue a fresh order within a period of three months from the date of receipt of a copy of this order. Petition disposed off.

Summary

Issues: Challenge to order in original dated 29.12.2023, mismatch between taxable turnover in GSTR 9 and GSTR 3B, inadvertent error in reflecting credit notes, imposition of tax, interest for belated filing of returns, compliance with principles of natural justice.

In this case, the petitioner challenged an order dated 29.12.2023, which confirmed the highest tax proposal due to a mismatch between the taxable turnover reported in GSTR 9 and GSTR 3B. The petitioner argued that the disparity arose due to an inadvertent error in reflecting credit notes in the returns. The petitioner contended that the credit notes were properly reflected in the annual return in GSTR 9, explaining the mismatch. Additionally, the petitioner highlighted an error in the order where a lump sum tax amount was imposed instead of treating the differential amounts as taxable supply and imposing tax at the applicable rate. The petitioner also accepted liability for interest on belated filing of returns and agreed to pay it subject to any waiver recommended by the GST Council. The petitioner also agreed to remit 10% of the disputed tax demand for certain defects as a condition for remand.

The respondent, represented by the Additional Government Pleader, confirmed that the audit report was shared with the petitioner, and principles of natural justice were followed in considering the petitioner's reply. Upon examination, it was noted that certain defects in the impugned order were dropped based on the petitioner's submissions. The order partly set aside the original decision concerning specific defects, directing the petitioner to remit 10% of the disputed tax demand within 15 days for certain issues. Once the payment was made, the respondent was instructed to provide the petitioner with a reasonable opportunity, including a personal hearing, and issue a fresh order within three months.

Ultimately, the High Court disposed of the writ petition without costs, closing connected miscellaneous petitions. The judgment provided a detailed analysis of the issues raised, addressing the discrepancies in the tax assessment and outlining the steps for reconsideration and fresh order issuance based on the petitioner's compliance with the specified conditions.