Entire GST Demand Confirmed Without Considering 58% Paid via ECRL: Madras HC Directs Reconsideration [Read Order]

In a recent decision, the Madras High Court set aside a GST assessment order after finding that the GST authorities failed to consider a substantial payment already made by the petitioner through the Electronic Credit Ledger ( ECRL ).

The case pertained to a tax demand arising from discrepancies between the petitioner’s GSTR-1 and GSTR-3B returns.

The petitioner contended that although a detailed reply was submitted to the show cause notice, and 58% of the differential tax amount was paid through a debit from the Electronic Credit Ledger ( ECRL ), the entire proposed demand was confirmed without accounting for the remitted amount. This, according to the petitioner, was a clear oversight and a violation of principles of natural justice.

Also read: Income Tax Refund Paid without Sanctioned Interest: Madras HC Directs Dept to Take Action on Pending Claim [Read Order]

During the hearing, Mr. T.N.C. Kaushik, Additional Government Pleader, appearing for the respondents, fairly conceded that the matter may warrant reconsideration.

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The court after examining the impugned order, observed that it had indeed failed to acknowledge the 58% remittance made by the petitioner through the ECRL, thereby necessitating a fresh evaluation of the matter.

Accordingly, the bench of Senthilkumar Ramamoorthy set aside the assessment order and remanded the case to the adjudicating authority for reconsideration. The authority was directed to provide a reasonable opportunity to the petitioner and to duly take into account the payments already made via the electronic credit ledger before passing a fresh order.

As the second respondent had only been impleaded as a garnishee in connection with a bank attachment arising from the now-set-aside order, the writ petition was disposed of without issuing notice to them. Consequently, the Court ordered that the bank attachment be lifted and closed all connected miscellaneous petitions, with no order as to costs.

Also read: Seized Documents From Group Companies Justify Coordinated Investigation: Madras HC Upholds Transfer u/s 127 of the ITA [Read Order]

To Read the full text of the Order CLICK HERE

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