The Madras High Court quashed an assessment order as the defects not cured due to availability of records in custody of the Central GST Authority.
The petitioner assailed the assessment order in respect of financial years 2019-20, 2020-21 and 2021-22, respectively. The petitioner stated that he is a registered person under applicable GST laws. Pursuant to a surprise inspection, it is stated that the petitioner received an intimation in Form DRC01A and a show cause notice in Form DRC-01. The petitioner replied to the intimation by pointing out that the relevant books are not available with the petitioner as regards defect no.2, which pertains to the difference in outward taxable turnover between GSTR-3B, GSTR-1 and e-way bills.
The counsel for the petitioner pointed out that the claim relating to circular trading could not be dealt with by the petitioner on account of non availability of relevant documents to establish purchase, movement of goods and payments.
The counsel also pointed out that the petitioner informed the respondent about such non availability both in reply dated 07.01.2023 and the later reply dated 03.07.2023. By submitting that the petitioner has subsequently received the relevant documents, the counsel submitted that the petitioner should be provided an opportunity to establish that the purchases were genuine.
The Additional Government Pleader submitted that the impugned order is a reasoned order issued after taking into consideration the petitioner’s replies. For instance, the counsel pointsedout that the claim made in respect of defect no.3, which pertains to cancellation of e-way bills, was dropped upon consideration of the reply of the petitioner on 07.01.2023 and submissions made during the hearing.
A Single Bench of Justice Senthilkumar Ramamoorthy observed that “In exercise of discretionary jurisdiction, I am of the view that interference is warranted in this case because the non availability of documents, for reasons outlined above, impacted two out of the three defects in respect of which an order adverse to the petitioner was issued. Therefore, solely with a view to provide an opportunity to the petitioner to respond to these defects, the impugned order calls for interference.”
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