2025 (2) TMI 344 - HC - GST

Challenge to impugned order passed by the respondent - Mismatch between GSTR 3B and GSTR 2A - Non-generation of outward e-way bills - Non-generation of inward e-way bills - levy of penalty and interest - the petitioner is ready and willing to pay 10% of the disputed tax - HELD THAT - The petitioner shall deposit 10% of the disputed taxes as admitted by the learned counsel for the petitioner and the respondent within a period of four weeks from the date of receipt of a copy of this order. The impugned order dated 31.08.2024 is set aside - Petition disposed off.

2024 (9) TMI 811 - HC

ISSUES PRESENTED and CONSIDERED

The core legal issues considered in this judgment are:

Whether the discrepancies identified in the petitioner's tax returns, specifically the non-generation of outward and inward e-way bills, justify the impugned order passed by the respondent.
Whether the petitioner should be given an opportunity to explain the discrepancies after the impugned order has been passed.
The appropriate conditions under which the matter should be remanded back to the adjudicating authority.

ISSUE-WISE DETAILED ANALYSIS

Issue 1: Discrepancies in Tax Returns

Relevant Legal Framework and Precedents: The case revolves around compliance with the Goods and Services Tax Act, 2017, particularly concerning the filing of GSTR 3B and GSTR 2A returns and the generation of e-way bills. The precedent referenced is the case of Sree Manoj International Vs. Deputy State Tax Officer, where similar circumstances led to a remand subject to a partial payment of disputed taxes.
Court's Interpretation and Reasoning: The Court acknowledged the discrepancy in the petitioner's returns, specifically the non-generation of outward and inward e-way bills. The mismatch between GSTR 3B and GSTR 2A was initially considered but later dropped as a concern. The Court found the petitioner's request for an opportunity to address the discrepancies reasonable, especially given the precedent set in the Sree Manoj International case.
Key Evidence and Findings: The evidence primarily consisted of the petitioner's tax filings and the notices issued by the tax authorities. The petitioner had responded to the notices but was not given an opportunity to further explain before the impugned order was passed.
Application of Law to Facts: The Court applied the principles from the Sree Manoj International case, allowing for a remand of the matter with the condition that the petitioner pay 10% of the disputed taxes.
Treatment of Competing Arguments: The respondent did not have any serious objections to the petitioner's request for a remand, provided the petitioner complied with the payment condition.
Conclusions: The Court concluded that the petitioner should be given a chance to address the discrepancies, subject to the payment of 10% of the disputed taxes.

Issue 2: Conditions for Remand

Relevant Legal Framework and Precedents: The Court relied on the precedent of remanding cases with conditions, as seen in similar tax dispute cases.
Court's Interpretation and Reasoning: The Court determined that setting aside the impugned order and treating it as a show cause notice, with conditions for payment and subsequent objection filing, was an appropriate remedy.
Key Evidence and Findings: The petitioner's willingness to pay 10% of the disputed taxes was a critical factor in the Court's decision to remand the matter.
Application of Law to Facts: The Court applied the principle of allowing taxpayers an opportunity to rectify discrepancies, provided they demonstrate good faith by making a partial payment.
Treatment of Competing Arguments: The Court balanced the petitioner's request for a fair opportunity with the respondent's interest in ensuring compliance with tax laws.
Conclusions: The Court concluded that the remand with conditions was justified and necessary to ensure a fair adjudication process.

SIGNIFICANT HOLDINGS

The impugned order dated 31.08.2024 was set aside, and the petitioner was required to deposit 10% of the disputed taxes within four weeks.
The Court established that any amount already recovered or paid should be adjusted against the 10% requirement.
The Court mandated that the entire process of verification and payment adjustment be completed within four weeks.
The Court held that failure to comply with the payment condition would result in the restoration of the impugned order.
Upon compliance, the impugned order would be treated as a show cause notice, allowing the petitioner to submit objections within four weeks.
The Court emphasized that if objections were not filed within the stipulated period, the original order of assessment would be reinstated.

The judgment underscores the importance of procedural fairness in tax assessments and the need for taxpayers to be given an opportunity to address discrepancies, provided they demonstrate a willingness to comply with tax obligations through partial payment. The Court's decision balances the interests of both the taxpayer and the tax authorities, ensuring compliance while allowing for a fair hearing of the petitioner's case.

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