2024 (8) TMI 945 - HC - GST

Challenge to order in Form GST DRC - 07 - difference of tax amount between GSTR 3B and GSTR 1 - impugned orders passed without considering the reply submitted by the petitioner - violation of principles of natura; justice - HELD THAT - It is an admitted fact that there was a discrepancy in respect of tax liability of the petitioner in GSTR 1 and GSTR 3B for the month of July, 2021. According to the petitioner, they filed its reply dated 01.11.2022 to the notice issued under section 61 stating that there was a clerical error in GSTR 3B and GSTR 1 has been filed correctly and that, they also produced the necessary bills for the same. However, the respondent has not considered the same on the premise that the reply was filed beyond the stipulated time. Thus, it is evident that the respondent, without considering the reply submitted by the petitioner, passed the impugned orders, which are in violation of the principles of natural justice. The orders impugned herein are set aside and the matter is remanded to the respondent for fresh consideration on condition that the petitioner shall pay a 15% of the disputed tax to the respondent within a period of four weeks from the date of receipt of a copy of this order; and the setting aside of the impugned orders will take effect from the date of payment of the said amount. Petition disposed off by way of remand.

Summary

Issues:
Challenge to order in Form GST DRC - 07 and Reference No.ZD3308231060700, violation of principles of natural justice.

Analysis:
The petitioner, a registered dealer, challenged the order in Form GST DRC - 07 and Reference No.ZD3308231060700 issued by the respondent. The petitioner contended that they filed monthly returns in GSTR 3B and GSTR 1 for the Financial Year 2021-2022 and paid tax liability. The respondent raised concerns about a tax amount difference between GSTR 3B and GSTR 1 for July 2021, leading to various notices and actions by the respondent. The petitioner explained a clerical error in GSTR 3B but maintained correctness in GSTR 1, providing necessary bills. The respondent, however, issued further notices and orders without considering the petitioner's explanations, leading to the present challenge before the court.

The petitioner's counsel argued that the petitioner, a bona fide dealer, regularly complied with tax obligations and lacked any malafide intentions or fraudulent activities. The counsel highlighted that the mismatch between GSTR 1 and GSTR 3B was a clerical error, attributing the delayed response to the accountant's departure. The counsel urged the court to direct the respondent to reconsider the petitioner's submissions and grant another chance to prove their claim. Conversely, the Government Advocate for Taxes representing the respondent contended that the petitioner failed to respond or attend personal hearings, leading to the issuance of impugned orders based on available records.

After hearing both sides and reviewing the case materials, the court acknowledged the discrepancy in the petitioner's tax liability filings for July 2021. It noted the petitioner's explanation of a clerical error and submission of necessary documents, which the respondent disregarded due to a delayed response, violating principles of natural justice. Consequently, the court set aside the impugned orders and remanded the matter to the respondent for fresh consideration. The court imposed a condition for the petitioner to pay 15% of the disputed tax within four weeks, with the setting aside of orders effective upon payment. The petitioner was instructed to submit any objections and documents within two weeks thereafter, following which the respondent would review and decide on the matter after providing a personal hearing to the petitioner promptly.

In conclusion, the court disposed of the writ petition with the outlined terms, emphasizing no costs incurred. The connected miscellaneous petitions were closed accordingly.