2024 (8) TMI 767 - HC - GST

Challenge to assessment orders relating to assessment years 2018-19, 2019-20, 2020-21 and 2021-22 - responses, to the queries raised in the course of inspection, were not taken into consideration while issuing the impugned orders - mismatch between the petitioner's GSTR 3B and GSTR 1 returns - HELD THAT - The petitioner has placed on record the statement dated 19.09.2022 and the reply dated 26.10.2022. Although the inspection report and the findings of the inspection officer were adverted to in the impugned order, the petitioner's responses in the course of inspection do not find mention therein. It also appears that the tax proposals were confirmed under Section 74 of applicable GST enactments. As regards assessment period 2019-20, on examining the order, with regard to defect no.2 relating to the mismatch between purchase value as per GSTR 2A and aggregate value of e-way bills, the tax dues as per the e-way bill was Rs. 4,01,89,368/-, whereas, it was Rs. 4,15,51,852/- as per GSTR 2A. Liability, if any, should have been imposed on the difference between these two figures, which amounts to Rs. 13,62,400/-. The petitioner cannot be absolved of all responsibility for the current state of affairs since the petitioner failed to reply on merits during the adjudication process although about three months' time was provided after the show cause notice. For such reason, it is also necessary to put the petitioner on terms. The orders impugned herein are set aside on condition that the petitioner remits 5% in relation to each head of demand with the qualification that, as regards the defect no.2 in assessment year 2019-20, 5% shall be paid on Rs. 13,62,400/- and not on the amount specified in the impugned order. Such remittance shall be made within 15 days from the date of receipt of a copy of this order. Within the said period, the petitioner is permitted to submit a reply in respect of the show cause notices. The Writ Petitions are disposed of.

Summary

Issues:
Challenging assessment orders for multiple years - 2018-19, 2019-20, 2020-21, and 2021-22.

Detailed Analysis:

1. The petitioner challenged assessment orders for various years after responding to queries raised during inspection. The petitioner submitted replies and documents but later received show cause notices leading to the impugned orders. Rectification petitions were filed by the petitioner but were not acted upon, prompting the filing of writ petitions.

2. The petitioner's counsel argued that responses to inspection queries were not considered in the impugned orders. Common issues included discrepancies in GSTR 3B and GSTR 1 returns, Input Tax Credit disparities, and post-supply discounts. The petitioner explained reasons for e-way bills discrepancies, including transaction value thresholds and transportation distances, which were allegedly disregarded in the orders.

3. The counsel highlighted that tax proposals were confirmed under Section 74 of GST enactments without meeting Section 74 requirements. The counsel emphasized the need for the proper officer to independently assess findings rather than solely relying on the inspection officer's report, citing relevant court judgments and circulars.

4. A computational error in the 2019-20 order was pointed out, imposing a higher liability than warranted. The petitioner agreed to remit 5% of the disputed tax demand for each defect but clarified the amount for one specific defect. The respondent contended that the petitioner failed to upload replies during inspection, leading to the unavailability of responses on the common portal.

5. The impugned orders referenced the inspection report and findings but did not mention the petitioner's responses during inspection. The orders confirmed tax proposals under Section 74. The court set aside the orders conditionally, requiring the petitioner to remit 5% for each demand and submit replies within 15 days. The respondent was directed to provide a reasonable opportunity for a fresh decision within three months.

6. The writ petitions were disposed of with no costs, and connected miscellaneous petitions were closed accordingly.