The Madras High Court found fault in the GST ( Goods and Services Tax ) order which ignored petitioner’s GSTR 1 returns and GSTR 9 returns statements. Thus, the court set aside the order and remanded for reconsideration without any pre-spoist.
The Petitioner, Perfect Assayers Private Limited filed a petition challenging an order dated 28.09.2023, asserting that their contention that their reply to the show-cause notice had not been duly considered. The order had been issued in response to a notice alleging discrepancies between the petitioner’s GSTR 3B returns, GSTR 1 statement, and auto-populated GSTR 2A.
The petitioner’s counsel submitted that the mismatch between the GSTR 3B returns and GSTR 1 statement arose due to the omission of credit notes, which were duly accounted for in the GSTR 1 statement and annual return in GSTR 9. Additionally, they explained the variation in input tax credit between the petitioner’s GSTR 3B returns and the auto-populated GSTR 2A, attributing it to a supplier’s failure to reflect invoices.
The counsel also pointed out that the annual return and the relevant invoices were enclosed with the reply to the show cause notice. By turning to the impugned order, counsel pointed out that the petitioner’s explanation and the relevant documents were not taken into consideration.
Mr.V.Prashanth Kiran, Government Advocate, accepted notice for the respondent. The counsel pointed out that the petitioner was put on notice about the mismatch and called upon to produce relevant documents. Since the petitioner failed to provide supporting documents, he submitted that the tax proposal was confirmed.
The High Court noted that in the reply to the show cause notice, the petitioner has explained the alleged discrepancy between the GSTR 3B and GSTR 1 by pointing out that the discrepancy is on account of not reckoning the total value of credit notes.
In addition, the petitioner has placed on record the GSTR 1 statement and the annual return in GSTR 9. Both these documents reflect the total value of credit notices as Rs.68,91,320/-.
As regards the variation in input tax credit between the GSTR 3B returns of the petitioner and the auto-populated GSTR 2A, the petitioner has explained the difference by pointing out that one of the suppliers, S.M.Network, did not reflect invoices for supplies made by such supplier. The relevant invoices were enclosed with the reply.
The bench of Justice Senthilkumar Ramamoorthy stated that “In spite of the petitioner’s GSTR 1 statement and the annual return in GSTR 9 being available, no reasons are specified as to why the petitioner’s explanation was rejected.”
Further stated that, even with regard to the discrepancy between the petitioner’s GSTR 3B returns and the auto-populated GSTR 2A, in spite of the petitioner enclosing the relevant invoices to explain the discrepancy, the impugned order does not discuss the explanation and record reasons for rejecting the same. Consequently, the impugned order cannot be sustained.
Consequently, the court set aside the impugned order and remanded the matter for reconsideration without any pre-deposit. The respondent was directed to afford the petitioner a reasonable opportunity, including a personal hearing, and issue a fresh order within three months. The High Court disposed of the petition accordingly.
Mr.S.Murugappan appeared for the petitioner.
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