Disparity in GSTR-3B and GSTR 2A/2B due to ITC claimed in Respect of Customs Duty: Madras HC quashes GST Order with Condition [Read Order]

The Madras High Court quashed the Goods and Services Tax ( GST ) Assessment order demanding tax liability stating discrepancy found in GSTR-3B and GSTR 2A/2B with a condition directing the petitioner to remit 10% of disputed tax liability.

The Petitioner Subh Sri Agencies has challenged the GST assessment order dated 04.07.2023. The petitioner had received a show cause notice regarding inconsistencies between their GSTR 3B returns and the GSTR 2B statement. Despite the petitioner's explanation attributing the difference to Input Tax Credit claims on customs duty, the tax demand was confirmed under the contested order.

The petitioner's counsel highlighted the 17.03.2023 response, reiterating the explanation regarding the customs duty Input Tax Credit and asserted that it was not duly considered. In a bid to seek remedy, the petitioner expressed willingness to remit 10% of the disputed tax demand.

Responding on behalf of the respondent, Mr. T.N.C. Kaushik, Additional Government Pleader, acknowledged the issuance of the impugned order and argued that the period for filing an appeal had lapsed. However, he noted the petitioner's explanation provided on 17.03.2023, emphasizing the importance of the ITC clarification.

The bench of Justice Senthilkumar Ramamoorthy observed that the impugned order had disregarded the petitioner's explanation due to alleged lack of relevant documents. However, recognizing the need for fairness, the court quashed the order on the condition that the petitioner remit 10% of the disputed tax demand within two weeks.

Additionally, the petitioner was granted the opportunity to submit necessary documents related to the ITC claim. Upon receipt and verification of these documents, the respondent was directed to provide a reasonable opportunity for the petitioner to be heard, followed by the issuance of a fresh order within two months.

To Read the full text of the Order CLICK HERE

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates