The Madras High Court set aside the GST ( Goods and Services Tax ) order, however, 10% pre-deposit was imposed with regards to the second issue related to RCM ( Reverse Charge Mechanism ).
The assessee, Arul Rubbers Pvt Ltd challenged the orders on the ground that the GST documents submitted by the assessee were not duly considered by the GST department. The assessee-cum-petitioner submitted that he received a draft proposal pursuant to the audit, where it filed the reply.
After a while, a Show Cause Notice ( SCN ) was issued by the department and was duly replied. Further, the department issued the impugned order.
The assessee’s counsel, Mr. P. Gowtham for Mr.G.Natarajan submitted that there were two issues dealt with both in the draft proposal and the show cause notice. The first issue related to the turnover of the petitioner as reported in the GSTR 3B return for July 2018-19. He submits that an inadvertent error was committed by reporting Rs.107,59,17,561/- instead of Rs.1,07,59,175/-.
The counsel pointed out that the error was rectified while filing the GSTR 1 return for July 2018-19 and the reconciliation statement in Form GSTR 9C for the year.
Further asserted that in spite of submitting these documents, the GST liability was confirmed on the ground that the assessee had not submitted the sales list, outward supply invoices and reconciliation statement, which was not demanded by the tax department.
With regards to the second issue, the counsel submitted that upon noticing that excess RCM of Rs.2,17,148/- had been availed of, the petitioner reversed such excess availment in the GSTR 3B return for August 2018.
The representative also submitted that this was brought to the notice of the respondent both in the reply to the ASMT 10 notice and in the reply to the show cause notice.
The respondent side was appeared by the Additional Government Pleader, Mr.C.Harsha Raj. He argued that the petitioner’s replies were duly considered and that the tax proposals were confirmed on account of non production of documents such as the sales list and outward supply invoices.
The bench of Justice Senthilkumar Ramamoorthy observed that petitioner has placed on record the relevant GSTR 3B, GSTR 1 and GSTR 9C returns. And, upon examining these documents, the court found a prima facie opinion that the amount variation could have been an inadvertent error. Thus, in the interest of justice, the court decided to provide another opportunity on this issue.
Further, the Madras High Court, with regards to the issue of RCM, required the GST Assessing Officer to look into the matter again. Thus, to protect the revenue’s interest, the bench decided to set aside the tax order on 10% pre-deposit of the disputed tax demand.
The High Court directed the respondent-GST authorities to provide a personal hearing once the amount is remitted by the assessee within 15 days of the order of the court. Also, directed to issue a fresh GST order on receipt of such additional documents within 3 months.
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