2024 (5) TMI 400 - HC - GST

Rejection of rectification petition - turnover of the petitioner was erroneously reported in the GSTR 1 return - petitioner states that the correct turnover was reported in the GSTR 3B return and the entire tax liability is on account of an inadvertent error committed while filing the GSTR 1 return - HELD THAT - The petitioner's reply dated 05.02.2024 has been placed on record. In such reply, the petitioner asserted that the correct turnover was Rs. 92,28,895/- and not Rs. 9,22,89,895/- as wrongly reported in the GSTR 1 return. Since the petitioner did not file the annual return for the relevant assessment period, it appears that the petitioner did not rectify this error in the annual return. A tax liability of Rs. 1,48,20,834/- was imposed on the petitioner under the impugned assessment order. Prima facie , it appears that such tax liability had arisen only on account of the turnover reported in the GSTR 1 return. The interest of justice warrants that the petitioner be provided an opportunity to establish that the genuine turnover was only Rs. 92,28,895/- and not Rs. 9,22,89,895/-. Solely for such reason, the impugned order calls for interference - the impugned order dated 20.12.2023 is quashed and the matter is remanded for reconsideration. Petition disposed off by way of remand.

Summary

Issues involved: Challenge to assessment order and rejection of rectification petition.

Challenge to assessment order: The petitioner, a registered person under GST enactments, had their GST registration cancelled. Subsequently, an assessment order was passed without the petitioner's knowledge, resulting in a tax liability due to an error in reporting turnover in the GSTR 1 return. The petitioner submitted a representation correcting the turnover amount, supported by invoices, and requested an opportunity to contest the tax demand. The respondent contended that the petitioner failed to respond to prior notices and that a revision of assessment cannot be done in a rectification proceeding. The Court found that the tax liability arose due to the error in the GSTR 1 return and directed a reconsideration, allowing the petitioner to establish the correct turnover amount within a specified timeframe. The impugned order was quashed, and the matter remanded for fresh consideration, with the bank attachment raised.

Rejection of rectification petition: The rectification petition was rejected on the grounds that a revision of assessment cannot be carried out in a rectification proceeding. The petitioner's reply asserting the correct turnover amount was not reflected in the annual return, leading to a tax liability. The Court held that the petitioner should be given an opportunity to prove the genuine turnover amount and directed the respondent to reconsider the matter upon submission of a detailed reply by the petitioner within a specified timeframe. The impugned order was set aside, and the bank attachment was lifted. The writ petition was disposed of without costs, along with connected miscellaneous petitions.