2023 (9) TMI 502 - HC - GST

Cancellation of GST registration of petitioner - difference between the turn over disclosed in GSTR-01 and the ITC claimed in GSTR-3B - HELD THAT - The impugned Assessment Order dated 21.06.2022 does not bear any discussion as neither reply was filed by the petitioner before the respondent prior to passing of the impugned order nor the petitioner appeared before the respondent. Failure of the petitioner to file reply on account of closure of the business can be attributed to the negligence of the petitioner. However, on that score alone, the impugned order cannot be sustained. Petitioner deserves a chance to explain the case as there is a possibility of the petitioner establishing that credit was available for being set off against the tax liability of the petitioner for the period in dispute - The petitioner shall deposit a sum of Rs. 20,00,000/. This amount to be deposited by the petitioner shall be either appropriate or refunded to the petitioner subject to the final outcome of the proceedings pursuant to this order. The case is remitted back to the respondent to redo the exercise subject to the petitioner depositing the aforesaid sum of Rs. 20,00,000/- within a period of four weeks from today - Petition disposed off.

Summary

Issues Involved:
1. GST registration cancellation leading to inability to file returns.
2. Discrepancy between turnover disclosed in GSTR-01 and ITC claimed in GSTR-3B.
3. Validity of the impugned Assessment Order and recovery notice.
4. Petitioner's request for an opportunity to explain the discrepancy and willingness to deposit a token amount.
5. Failure to file a reply before the respondent due to business closure.

Summary:
The petitioner's GST registration was cancelled, preventing access to the web portal for filing returns. The impugned Assessment Order was issued without prior notice, leading to a discrepancy between turnover and ITC claimed. The petitioner sought an opportunity to explain the discrepancy and offered to deposit a token amount. The respondent argued that the petitioner had access to relevant information on the web portal. The court noted the discrepancy and the petitioner's willingness to deposit a token amount as proof of good faith. The impugned Assessment Order was deemed invalid due to the petitioner's closure of business affecting reply submission. The petitioner was directed to deposit Rs. 20,00,000, with the case remitted back to the respondent for review. Failure to comply would result in automatic revocation of the order. The petitioner was instructed to provide necessary documents to support their entitlement to relief. The Writ Petitions were disposed of with these observations, without costs, and connected petitions were closed.